Property Management Income Taxes In Colorado

Updated August 7, 2026

11 min read

This guide covers how rental and management income is taxed in Colorado: what the state takes, what the IRS takes, who has to withhold on an out-of-state owner, and when each return is due. Every figure is tied to the statute, agency rule, or published guidance that sets it, so you can confirm a rate before acting on it.

State Income Tax On Rental And Management Income

Colorado uses a single flat rate on modified federal taxable income, and the same rate applies to individuals, estates, trusts, and corporations. The rate moves: it was 4.25 percent for tax year 2024 and 4.4 percent for tax year 2025, because a TABOR mechanism can temporarily cut the 4.4 percent base rate in a year when state revenue exceeds the constitutional spending limit. Rental income flows through the federal return, so it lands in Colorado taxable income automatically.

The Colorado income tax rate for tax year 2025 is 4.4 percent. The Department's published rate history shows 4.4 percent for 2022 and 2023, 4.25 percent for 2024, and 4.4 percent for 2025. (Colorado Individual Income Tax Guide, Colorado Income Tax Rates table)
Colorado imposes an income tax on the modified federal taxable income of each individual, whether a Colorado resident, a nonresident, or a part-year resident. For part-year residents and nonresidents the tax is apportioned, so an out-of-state owner with Colorado rentals still has Colorado taxable income. (Colorado Individual Income Tax Guide, Part 2: Calculating Colorado Income Tax)
The statutory structure is a single rate applied to individuals, estates, trusts, and corporations alike. Under current law the base rate is 4.4 percent, and for any income tax year commencing on or after January 1, 2025 but before January 1, 2035 the rate is temporarily reduced if state revenue exceeded the constitutional limitation on state fiscal year spending for the fiscal year that ended during the income tax year. (Colorado General Assembly, SB25-138 bill summary describing current law)
Colorado also imposes an alternative minimum tax on individuals, computed on the Colorado Alternative Minimum Tax Computation Schedule (DR 0104AMT) after the taxpayer prepares IRS Form 6251. Colorado AMT is in addition to the normal Colorado income tax. (Colorado Individual Income Tax Guide, Alternative minimum tax)
Partnerships and S corporations file Form DR 0106, the Partnership and S Corporation Income Tax Return, and C corporations file Form DR 0112. Individuals file Form DR 0104. (Colorado Taxes and Fees Due Date Guide, Income Tax)
For individuals with Colorado taxable income of less than $50,000, the Department publishes tax tables that approximate the tax determined at the applicable prescribed rate rather than requiring a direct rate computation. (Colorado Individual Income Tax Guide, Colorado Income Tax Rates)

Withholding And Employer Taxes

Colorado wage withholding tracks federal withholding: if federal withholding is required on Colorado wages, Colorado withholding is required too, and the employer is liable whether or not it actually withheld. Employers register with the Department of Revenue and file DR 1094 on a weekly, monthly, or quarterly cycle. Colorado does not make property managers withhold on rent remitted to out-of-state owners. The only Colorado real estate withholding is on a nonresident's sale of Colorado real property.

Any employer subject to Colorado wage withholding must register with the Colorado Department of Revenue. In general, whenever federal wage withholding is required for any Colorado wages, Colorado wage withholding is required as well, and wages exempt from federal withholding are generally exempt from Colorado withholding. (Colorado Withholding Tax Guide, Colorado wage withholding requirements)
An employer required to withhold Colorado income tax is liable for the required withholding whether or not the employer actually withholds the tax. The DR 1098 worksheet prescribes the method for calculating the amount. (Colorado Withholding Tax Guide; C.R.S. Section 39-22-604)
Wage withholding is remitted on Form DR 1094 on a schedule that depends on annual liability: weekly filers remit taxes accumulated as of any Friday by the third business day thereafter, monthly filers by the 15th day of the following month, and quarterly filers by the last day of the month following the quarter. Form DR 1107 is used for withholding on 1099 payments. (Colorado Taxes and Fees Due Date Guide, Withholding Tax and Wage Withholding)
Every employer must prepare a Form W-2 for each employee and provide copies both to the employee and to the Department no later than January 31 of the following year. (Colorado Withholding Tax Guide, W-2 requirements)
The 2026 unemployment insurance chargeable wage base is $30,600, up from $27,200 in 2025, $23,800 in 2024, and $20,400 in 2023. The Division of Unemployment Insurance sets each employer's premium rate annually and mails a Rate Notice in December. (Colorado Department of Labor and Employment, Premium Rates, Chargeable Wages)
Colorado's Paid Family and Medical Leave Insurance (FAMLI) premium is 0.88 percent of the employee's wage, split 0.44 percent employer and 0.44 percent employee. Businesses with nine or fewer employees submit wage reports and send in only the 0.44 percent employee share each quarter. Colorado law caps the premium at 1.2 percent. (Colorado FAMLI Division, Employers)
Colorado has no nonresident owner withholding on rent. The only real estate related withholding is on transfers: sales of a Colorado real property interest by a nonresident transferor are subject to withholding remitted on Form DR 1079, with the amount determined on Form DR 1083, due within 30 days of the closing date. (Colorado Department of Revenue, DR 1079, Payment of Withholding Tax on Certain Colorado Real Property Interest Transfers; Colorado Taxes and Fees Due Date Guide)
On a nonresident transfer, the required withholding is the lesser of 2 percent of the sales price or the net proceeds otherwise due to the transferor. Withholding is not required if the sales price is $100,000 or less, or if the withholding agent relies in good faith on a written affirmation from the transferor on the second page of Form DR 1083 that an exception applies, such as the transferor being a resident individual, estate, or trust. (Colorado Department of Revenue, DR 1083 (10/01/25), Withholding Calculation and Remittance and Exceptions to Withholding Requirement)

Federal Obligations

Colorado piggybacks on the federal return, which means the federal side is doing most of the work. Owners report rental income and expenses on Schedule E, depreciate the building over 27.5 years, and the management company files information returns for vendors and for rent paid over to owners. The reporting threshold changed for 2026.

Rental income and expenses for residential rental property are reported on Schedule E, and IRS Publication 527 explains how to report them. (IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes))
Residential rental property is depreciated over 27.5 years under the MACRS General Depreciation System using the straight line method and a mid-month convention, with first year depreciation limited to the months the property is in service. (IRS Publication 527, MACRS Depreciation)
Payments of $600 or more during the calendar year in the course of a business to a person who is not an employee for services, including payments to an attorney, are reported on Form 1099-NEC. The threshold is $2,000 for payments made after December 31, 2025. (IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026))
For tax years beginning after 2025, the minimum threshold for reporting these payments on information returns and for performing backup withholding on them increased to $2,000, and it will be adjusted for inflation beginning in calendar year 2027. (IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), What's New)
Rents are reported on Form 1099-MISC and non-employee compensation on Form 1099-NEC. Both forms share the same combined IRS instructions and the same threshold change. (IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026))
Colorado starts from federal taxable income, so the depreciation and Schedule E figures computed for federal purposes carry directly into the Colorado return as modified federal taxable income. (Colorado Individual Income Tax Guide, Part 2: Calculating Colorado Income Tax)

Filing Deadlines

Colorado's due dates are unusually well consolidated in one Department publication. Income tax returns are due in April and May, sales tax on the 20th, withholding on a weekly, monthly, or quarterly cycle, and property tax at the county on a February and June installment schedule.

Individual Income Tax Return Form DR 0104 is due April 15 of the following year, October 15 under an extension. Individual estimated payments on Form DR 0104EP are due April 15, June 15, September 15, and January 15. (Colorado Taxes and Fees Due Date Guide, Individual Income Tax)
Partnership and S Corporation Income Tax Return Form DR 0106 is due April 15 of the following year or the 15th day of the fourth month following the close of the fiscal year. C Corporation Return Form DR 0112 is due May 15 of the following year or the 15th day of the fifth month following the close of the fiscal year. (Colorado Taxes and Fees Due Date Guide, Business Income Tax)
The State and State-Administered Sales Tax Return Form DR 0100 is due the 20th day of the month following the filing period end date, whether the filer is monthly, quarterly, annual, or seasonal. (Colorado Taxes and Fees Due Date Guide, Retail Sales Tax)
Withholding on Form DR 1094 is due weekly (taxes accumulated as of any Friday due the third business day thereafter), monthly (15th day of the following month), or quarterly (last day of the month following the quarter). Withholding statements (W-2 or 1099) are due January 31 of the following year, or 30 days after the business closes. (Colorado Taxes and Fees Due Date Guide, Withholding Tax and Wage Withholding)
Nonresident Real Estate Withholding on Form DR 1079 or DR 1083 is due within 30 days of closing. (Colorado Taxes and Fees Due Date Guide, Withholding Tax and Wage Withholding)
County Lodging Tax Return Form DR 1485 is due the 25th day of the month following the quarter end, and Local Marketing District Tax Return Form DR 1490 is due the 20th day of the month following the period end. (Colorado Taxes and Fees Due Date Guide, Local Jurisdiction Sales Tax)
Property taxes are due in full by April 30 or in two installments, the first by the last day of February and the second by June 15, paid to the county treasurer. (Morgan County, Colorado, Property Tax FAQs)

Recent Changes Worth Tracking

Effective January 1, 2026: The 2026 unemployment insurance chargeable wage base increased to $30,600, up from $27,200 in 2025. (Colorado Department of Labor and Employment, Premium Rates, 2026 Chargeable Wage Base)
Effective Property tax year 2026: The 2026 residential assessment rate for local government mill levies is 6.8 percent applied after a 10 percent reduction of the first $700,000 in actual value, with a minimum of $1,000 in assessed value. The 2026 residential assessment rate for school district mill levies is 7.05 percent. (Colorado Division of Property Taxation, Residential Local Government Assessment Rate and Residential School Assessment Rate)
Effective Tax year 2025: The Colorado income tax rate returned to 4.4 percent for tax year 2025 after having been temporarily reduced to 4.25 percent for tax year 2024. (Colorado Individual Income Tax Guide, Colorado Income Tax Rates table)
Effective Payments made after December 31, 2025: Federal change affecting every Colorado management company: the Form 1099-NEC and 1099-MISC reporting threshold rose from $600 to $2,000 for payments made after December 31, 2025, with inflation adjustment beginning in calendar year 2027. (IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), What's New)

Tax is one half of Colorado compliance. See our guide to Colorado property management laws and regulations for licensing, trust account, and disclosure rules.

This page is one half of the picture. See our guide to the Colorado taxes a management company pays directly for the rest.

Keeping This Straight

Tax rates and thresholds move more often than most operators expect, and the figures circulating in older articles go stale quickly. Check any rate against its citation before you quote it to an owner, and re-check them at the start of each tax year.

This guide is a starting point for professional managers, not tax or legal advice. For a specific filing, work with a CPA familiar with Colorado rental property, and confirm current figures with the Colorado Department of Revenue or the IRS.