Last updated: December 17th, 2025
Each state has unique income tax withholding rules. Below are Colorado's 2026 withholding instructions, including allowance calculations, standard deduction adjustments, and the percentage method for determining tax due.
Employers must also adhere to federal income tax withholding rules. More information can be found here about federal rates.
Alternatively, employers can automatically calculate payroll withholding by using ezPaycheck.
| State Abbreviation | CO |
|---|---|
| State Tax Withholding State Code | 08 |
| Acceptable Exemption Form | None |
| Basis For Withholding | Federal Exemptions |
| TSP Deferred | Yes |
| Special Coding | None |
| Additional Information | A state tax certificate is not required since Federal exemptions are used in the computation of the state formula. |
| Official State Tax Website | Visit Official Website |
Colorado introduced its own Employee Withholding Certificate (DR 0004) after 2020. Rather than traditional numbered 'allowances,' Colorado's form uses wage brackets and dependents to adjust withholding. For example, an employee may get a standard allowance for themselves and then an allowance based on number of qualifying children (e.g., 'Allowance for 1 child, 2 children, or 3+ children' with thresholds). Filing status is also considered (the form distinguishes Single/Head of Household vs. Married filing jointly in its tables) to apply different standard deductions.
| Component | Allowances | Notes |
|---|---|---|
| Yourself | Standard allowance | Based on filing status |
| Dependents | Based on number of qualifying children | Allowance for 1 child, 2 children, or 3+ children with thresholds |
Withholding = Based on DR 0004 worksheet calculation (wage brackets + dependents)
Colorado employees can claim themselves and dependents on the DR 0004 worksheet, but there are no explicit countable allowances for age or blindness. Employees with multiple jobs or spouses working are advised to use the DR 0004 calculator to adjust withholding.
For links to official state tax and revenue websites for all 50 states, visit our State and Local Tax Sites page.
Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program, and flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages times 26 to obtain the gross annual wages.
Determine the standard deduction by applying the following guideline and subtract this amount from the gross annual wages to compute the taxable income.
Standard Deduction = $5,500 (for Single) or $11,000 (for Married)
Apply the taxable income computed in step 5 to the following table to determine the annual Colorado tax withholding.
Divide the annual Colorado tax withholding by 26 and round to the nearest dollar to obtain the biweekly Colorado tax withholding.
Want to calculate in an easier way? Learn how to calculate Colorado taxes via ezPaycheck below.
Learn More| Annualized Wages | Deduction |
|---|---|
| All | $5,500 |
Standard deduction: $5,500 for Single filing status.
| Annualized Wages | Deduction |
|---|---|
| All | $11,000 |
Standard deduction: $11,000 for Married filing status.
Rate: 4.4%
Colorado uses a flat tax rate of 4.40% on all taxable income.
ezPaycheck simplifies payroll calculations, including Colorado's withholding rules. Easily compute taxes, generate reports, and print paychecks or tax forms.
We strive to provide accurate and up-to-date Colorado state tax information for 2026. If you notice any discrepancies, errors, or have questions about the tax rates or calculations shown on this page, please contact our support team. We appreciate your feedback and will review and update the information as needed.
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