How does Colorado tax remote workers?

There are a few situations to consider. You may fall into more than one category.

1. I lived in Colorado.
• If you're considered a full-year or part-year resident of Colorado, you'll be taxed on all income earned from any source during your time of residency. Be sure to file the appropriate return.
2. I worked remotely from Colorado.
• Colorado taxes income earned for personal services performed while in Colorado (even if you're a nonresident). This includes remote work for an employer or clients based outside Colorado if you were physically in the state while doing the work.
• You may be able to claim a credit for taxes paid to another state on your resident return for any income required to be reported in multiple states.
3. My employer was based in Colorado.
• If your employer was based in Colorado, they may have withheld Colorado taxes from your Colorado wages as shown on your W-2. However, if you didn't live or physically work in Colorado, you will not owe Colorado taxes on those wages and can file a nonresident return to claim a refund of those withholdings.
• If you are a Colorado nonresident, you did not physically work in Colorado, and your employer did not withhold Colorado state taxes, you probably don't need to file a Colorado return at all unless you have a Colorado nonresident filing requirement.

If your Colorado taxable wages were minimal and you didn't do any other business in Colorado, it's possible you'll be exempt from filing regardless of residency. See the Colorado DR-104 or DR-104PN instructions for more information.