Work in Colorado, Live in Wyoming: Tax Filing Guide

Colorado nonresident tax

Does Colorado tax nonresident wages?

Colorado taxes income earned within the state regardless of where the worker lives. The state applies a flat income tax rate of 4.4 percent to taxable income, and this rate is the same for residents and nonresidents. State law temporarily reduces the rate in years when state revenue exceeds its constitutional limit, so check the rate for the year you file. Colorado employers also collect the FAMLI paid leave premium, set at 0.88% of wages per employee for 2026. If you live in Wyoming and commute to a job in Colorado, your employer should withhold Colorado income tax from each paycheck just as it would for a Colorado resident.

Nonresidents calculate their Colorado tax by completing Schedule DR 0104PN, which determines an apportionment percentage. You divide your Colorado-source income by your total federal income, then apply that percentage to the tax computed on your full taxable income. The result is the Colorado tax you owe. Because Colorado uses a flat rate rather than graduated brackets, the arithmetic is straightforward, but the DR 0104PN schedule is still required. Colorado starts with your federal taxable income on Form DR 0104 and applies Colorado-specific additions and subtractions before arriving at Colorado taxable income. The DR 0104PN then limits the tax to the share attributable to Colorado earnings.

Wyoming tax status

Does Wyoming tax your income?

Wyoming does not impose a state income tax on individuals. The state constitution, under Article 15 Section 18, contains a provision that requires any income tax to give taxpayers full credit for all sales, use, and property taxes paid in that year. Because Wyoming relies heavily on those revenue sources, this credit would cancel out most or all of the revenue an income tax could raise. The provision, added to the Wyoming Constitution in 1973, requires full credit against any tax on income for sales, use and ad valorem taxes paid in the taxable year.

For Wyoming residents who work in Colorado, this means you do not file a Wyoming income tax return, and there is no Wyoming tax liability to offset against your Colorado bill. Wyoming's sales and use tax combines a mandatory statewide 4 percent rate with any voter-approved local pennies. Because Wyoming does not tax income, the state does not issue withholding certificates or require employers to withhold state income taxes for work performed within Wyoming.

Credit and refund rules

Can you claim a credit or get your Colorado tax refunded?

In a typical two-state commute, your home state gives you a credit for income taxes paid to the work state so you do not pay twice on the same wages. That credit mechanism works only when your home state also taxes income. Since Wyoming has no income tax, there is no home-state tax against which to apply a credit. The Colorado tax you pay is a real, final cost with no offset from Wyoming.

If your employer withholds more Colorado tax than you actually owe, you will receive a refund of the overage when you file your DR 0104 return. But the correctly calculated Colorado tax on your Colorado-source income is not refundable simply because you live in a state without income tax. This is an important distinction: the Colorado obligation is the tax that Colorado law charges on income earned within its borders, and living in Wyoming does not waive it. Wyoming residents should factor this cost into any compensation comparison when evaluating a Colorado position against a Wyoming-based job.

Employer withholding

How does employer withholding work?

Your Colorado employer is responsible for withholding Colorado income tax from your wages. Colorado requires employers to withhold at the state rate on compensation paid for services performed in Colorado, regardless of where the employee lives. The employer reports this withholding to the Colorado Department of Revenue and provides you with a W-2 showing the amount withheld. If you are a W-2 employee, withholding should happen automatically once your employer has your completed federal Form W-4. Colorado bases withholding on the federal W-4 unless the employee chooses to give the employer the optional Colorado Employee Withholding Certificate, Form DR 0004.

If your employer has offices in both Colorado and Wyoming and you split time between them, clarify that withholding applies only to wages attributable to work physically performed in Colorado. Days worked from a Wyoming location are not subject to Colorado withholding. If you discover that your employer is not withholding Colorado tax or is withholding for the wrong state, notify payroll promptly. Underpayment of Colorado tax throughout the year can result in an estimated tax penalty when you file your return.

Filing requirements

Which tax returns do you file?

You file one state return: Colorado Form DR 0104, the individual income tax return. Attach Schedule DR 0104PN to calculate the portion of your tax that applies to Colorado-source income. On the DR 0104PN, the apportionment percentage is your Colorado income divided by your total federal income, expressed as a percentage. If all of your income was earned in Colorado, the percentage is 100 and the full tax applies. If you also earned income from Wyoming sources or other non-Colorado sources, the percentage will be lower and reduce your Colorado liability accordingly.

You do not file a Wyoming state income tax return because Wyoming has no individual income tax. On the federal side, file Form 1040 as usual. You can file your Colorado return electronically through the Colorado Department of Revenue's Revenue Online portal at no charge, or use approved tax preparation software. The Colorado filing deadline matches the federal deadline, typically April 15. Colorado grants an automatic six-month extension to file if you need more time, but the extension does not extend the payment deadline. Any tax owed is still due by April 15 to avoid interest charges.

Worked example: Wyoming resident earning wages in Colorado

Single filer, W-2 wages only, 2026 federal standard deduction and Colorado's 4.4% rate. Illustrative, not a tax projection.

Remote work

What if you work remotely from Wyoming for a Colorado employer?

If you work remotely from your home in Wyoming for an employer based in Colorado, the days you spend working from Wyoming are generally not Colorado-source income. Colorado taxes nonresidents based on where the work is physically performed, not where the employer is located. Colorado does not apply a convenience-of-the-employer rule, so your home office days in Wyoming are not claimed by Colorado. Only the days you physically travel to a Colorado location to work count as Colorado-source income.

If you work entirely from Wyoming and never enter Colorado for work purposes, you may have no Colorado filing obligation at all. The key is accurate day counting. Keep a contemporaneous log of which days you worked in each state so you can support your income allocation. Your DR 0104PN apportionment percentage should reflect only the income attributable to work performed in Colorado. If your employer withholds Colorado tax on all of your wages regardless of your work location, you can claim a refund for the over-withheld amount when you file your Colorado nonresident return.

Mid-year move

What happens if you move between the states during the year?

If you move from Wyoming to Colorado or from Colorado to Wyoming during the tax year, you file as a Colorado part-year resident. Use Schedule DR 0104PN to report income for both the part-year resident period and any nonresident period. During the months you lived in Colorado, all of your income from every source is subject to Colorado tax. During the months you lived in Wyoming, only your Colorado-source income is taxable by Colorado.

The DR 0104PN schedule separates income by period and calculates the apportionment percentage accordingly. If you moved from Wyoming to Colorado, your initial months of Colorado-source-only wages transition to full Colorado taxation once you become a resident. If you moved the other direction, your Colorado-resident income transitions to only Colorado-source income after you establish Wyoming domicile. Keep documentation of your move date: lease or purchase records, an updated driver's license, voter registration changes, and utility connection dates all help establish the transition if Colorado reviews your return.

Local taxes

Are there local income taxes in Colorado or Wyoming?

Colorado has a small number of local occupational privilege taxes in certain cities. Denver is the most prominent example, charging a monthly occupational privilege tax on employees who earn wages within the city. In Denver, employees who earn at least $500 a month for work in the city owe the employee occupational privilege tax of $5.75 per month, withheld by the employer. Greenwood Village charges $2 per month to the employee and $2 to the employer once $250 or more is earned in a calendar month. Aurora's occupational privilege tax was repealed effective January 1, 2025. These are flat monthly amounts rather than percentage-based income taxes, and they apply based on where you work, not where you live. If your Colorado job is located in one of these cities, the tax will appear as a small monthly deduction on your pay stub.

Wyoming has no local income taxes of any kind. Outside of the Denver metro area and a handful of other municipalities, most Colorado workers will not encounter a local occupational tax. Check with your employer or the city where your Colorado office is located to confirm whether a local tax applies to your position. For the current list of Colorado cities with an occupational privilege tax and their rates, see the relevant city's finance department website. This is general information, not tax advice.