Colorado’s flat 4.4% on gains
Colorado taxes a resident’s capital gain at its single income tax rate, 4.4% for 2026, after starting from federal taxable income. A $50,000 increase in Colorado taxable income therefore adds $2,200 before credits; a single filer moving from $60,000 to $110,000 goes from $2,640 to $4,840.
Colorado once offered a broad subtraction for gains on Colorado property held five years, but the current version is narrow. The Department’s guidance limits it to qualifying agricultural property and specific taxpayer conditions, so most brokerage and real estate sales get no special treatment. Because Colorado starts from federal taxable income, any federal home-sale exclusion flows through automatically, and a large gain can also trigger Colorado alternative minimum tax, which this worksheet asks for separately.
Colorado approved resident annual comparison
Colorado’s actual 2026 DR 0104EP estimated-tax worksheet uses 4.4% of approved Colorado taxable income. A September 2026 legislative fiscal publication also identifies 4.40% as current law; proposed later graduated rates are not enacted rates for this worksheet. Before other items, $100,000 of approved taxable income produces a $4,400 state estimate.
The agency capital-gain subtraction guidance imposes transaction and taxpayer conditions, including the qualifying agricultural scope of the current subtraction. A federal long-term gain is not automatically Colorado-exempt. Prepare the state additions, eligible subtractions and deduction adjustments independently before entering annual taxable income without and with the sale. A federal basis or deduction cannot be copied without checking state conformity.
The 2026 worksheet adds alternative minimum tax and credit recapture before subtracting credits. Both scenarios therefore require an approved additional-tax balance as well as complete usable nonrefundable credits; explicitly confirm zero when none applies. Withholding and estimated payments are excluded from liability comparison. Special allocations, refundable amounts and final return effects use entered final liabilities rather than an incomplete 4.4% multiplication.
Colorado preparation checklist
- Approved alternative minimum tax plus credit recapture before usable credits
- AMT and prior credit recapture
- Qualifying agricultural subtraction conditions