Denver Remote Work Tax Guide: Colorado\'s Rules for Telecommuting Professionals

Denver has become a magnet for remote workers who want mountain access, a vibrant city lifestyle, and reasonable taxes. Colorado\'s 4.4% flat income tax rate is competitive, and the state\'s clear income sourcing rules make multi-state tax filing straightforward for telecommuting professionals. Add TABOR refunds and you have one of the best remote work tax environments in the country.

Colorado\'s Income Sourcing Rules

Colorado taxes income based on where the work is physically performed. If you live in Denver and work remotely for a California company, your income is sourced to Colorado at the 4.4% flat rate — not California\'s 13.3% top rate. Colorado does not have a convenience-of-the-employer rule, making the tax break clean and defensible.

TABOR Refunds for Remote Workers

Colorado\'s Taxpayer\'s Bill of Rights (TABOR) limits government revenue growth. When the state collects more than allowed, the excess is refunded. Recent TABOR refunds have ranged from $400 to $800 per person. As a Denver remote worker filing Colorado taxes, you automatically qualify for these refunds.

Denver Occupational Privilege Tax

Self-employed individuals working in Denver must pay the Occupational Privilege Tax of $5.75 per month ($69 per year). While small, it is mandatory and must be filed monthly or quarterly with the Denver Department of Finance. Failure to register can result in penalties.

Multi-State Filing from Denver

If you travel to your employer\'s office in another state, Colorado provides a credit for taxes paid to that state. This prevents double taxation and makes occasional office visits financially manageable. Keep detailed records of your work location each day.

Denver\'s Remote Work Infrastructure

Denver\'s tech ecosystem supports a thriving freelance market in software development, design, content creation, and consulting. Companies like Dell, Tesla, and Oracle maintain major Denver operations and frequently hire contractors. The city\'s time zone (Mountain) is convenient for working with both East and West Coast teams. These practical advantages, combined with zero state tax, make Denver the optimal base for remote professionals.