Work in Wyoming, Live in Colorado: Tax Filing Guide

Colorado resident tax

Does Colorado tax your Wyoming wages?

Colorado taxes the entirety of a resident's income, whether it comes from sources inside or outside Colorado. The tax is based on your federal taxable income, modified by Colorado additions and subtractions. The Department's rate table shows 4.4% for 2025, 4.25% for 2024 and 4.4% for 2022 and 2023; the rate can be lowered temporarily in a surplus year, so confirm the 2026 rate when the Department publishes it.

Two Colorado adjustments matter to many wage earners. If you itemize and deduct state income taxes on your federal return, you must add them back on the Colorado return. And for tax years 2026 and later, if you claim the new federal deduction for overtime pay, you must add that amount back for Colorado. So a worker with overtime cannot simply multiply the lower federal figure by the Colorado rate.

Colorado also runs the FAMLI paid leave program. For 2026 the premium is 0.88% of wages, with 0.44% paid by the employer and 0.44% by the employee, and some employers choose to pay the whole premium themselves. Individual opt-in is for the self-employed: participation for self-employed workers is optional, and they must be Colorado residents. If you are unsure whether FAMLI premiums apply to your job, ask payroll.

A quick illustration of the overtime rule: say a single filer earns $65,000 and claims a $3,000 federal overtime deduction in 2026. Federal taxable income drops to $45,900, but Colorado adds the $3,000 back, so the Colorado base stays at $48,900. At 4.4%, the Colorado tax is $2,151.60 either way.

Wyoming tax status

Does Wyoming tax your income?

Wyoming has no individual income tax. The Legislature's tax overview lists the individual income tax rate as 0%, with a reference to Article 15, Section 18 of the Wyoming Constitution. That section says no tax may be imposed upon income without allowing full credit for all sales, use and ad valorem taxes paid in the taxable year by the same taxpayer to any taxing authority in Wyoming. The provision was adopted by the 1973 Legislature and ratified by the voters at the November 5, 1974 general election.

For a Colorado resident commuting to Wyoming, this means no Wyoming return and no Wyoming income tax on your wages. Your paycheck will show federal income tax, Social Security and Medicare, and no Wyoming state income tax line. Wyoming unemployment insurance is funded entirely by employer contributions, so it is not deducted from your pay either.

Filing requirements

Which tax returns do you file?

You file one state return: Colorado Form DR 0104, the individual income tax return, reporting all of your income, including wages earned in Wyoming. You do not file a Wyoming return. On the federal side, file Form 1040 as usual.

Colorado returns for calendar-year filers are due April 15 of the following year, and every individual gets an automatic six-month extension to file. The extension does not extend the time to pay, so send any balance by April 15 to avoid interest.

If you itemize, the federal deduction for state and local taxes is capped at $40,000 ($20,000 married filing separately) on 2025 returns; for 2026 returns the cap rises to $40,400 ($20,200), with a phaseout that can reduce it to a floor of $10,000 at higher incomes. Remember that Colorado makes you add back any state income tax you deducted on the federal return.

Employer withholding

How does employer withholding work?

Colorado's rule is broader than many commuters expect. Every employer making payment of Colorado wages is subject to Colorado withholding, and in general an employer must withhold Colorado income tax from all wages paid to a Colorado resident, whether the work is done inside or outside Colorado. The exception covers work in another state that imposes its own income tax withholding on those wages. Wyoming imposes none, so the exception does not apply to a Wyoming job.

In practice, a Wyoming employer that is not registered with Colorado may not have Colorado withholding set up. Ask payroll to withhold Colorado tax; you can give them Colorado's Employee Withholding Certificate, Form DR 0004, in addition to your federal W-4.

If too little is withheld, estimated payments come in. You must pay Colorado estimated tax if your total Colorado liability, less withholding and credits, exceeds $1,000. Payments are due April 15, June 15, September 15 and January 15 of the following year. To avoid a penalty, the required annual payment is the lesser of 70% of the current year's net liability or 100% of the previous year's.

Pay stub

What should your paycheck show?

Expect federal income tax, Social Security and Medicare on every paycheck, and no Wyoming income tax line, because Wyoming has none. If your employer has set up Colorado withholding for you, as Colorado's rules expect for a resident, you will also see a Colorado income tax line; if you gave payroll a Form DR 0004, the amount follows that certificate.

A FAMLI line may appear as well. The 2026 premium is 0.88% of wages, split evenly between employer and employee, but some employers pay the whole premium and deduct nothing. Wyoming unemployment insurance never appears, because employers fund it entirely.

If there is no Colorado line, set aside money for the April bill or start estimated payments. The penalty-free target is the lesser of 70% of this year's Colorado liability or 100% of last year's.

Worked example: Colorado resident earning wages in Wyoming

Single filer, W-2 wages only, 2026 federal standard deduction of $16,100, no overtime deduction or other Colorado adjustments, and Colorado's 4.4% rate for 2025 (confirm the 2026 rate). Approximate, not a tax projection.

Credit rules

Can you claim a credit for taxes paid to Wyoming?

Colorado gives residents a credit for income derived from sources in, and taxed by, another state. Wyoming does not tax your wages, so there is nothing to credit, and the Colorado tax on your Wyoming wages is a final cost with no offset.

The credit becomes relevant only if you also earn income in a state that does tax it. For example, if you had a job in a state with an income tax earlier in the year while living in Colorado, that state's tax on those wages could be credited on your Colorado return; your Wyoming wages still would not be.

Remote work

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

If you work from your Colorado home for a Wyoming employer, all of your income is still taxable in Colorado as a resident. Where the employer is based does not change that.

Remote work does change the employer's position. Colorado treats services as performed in Colorado when the employee is physically present in Colorado at the time, so home-office days are Colorado wages, and every employer making payment of Colorado wages is subject to Colorado withholding. If your employer withholds, your estimated payments shrink or disappear; if not, you pay through estimated payments or with your annual return. For a resident there is no convenience-of-the-employer question, because Colorado taxes all of your wages wherever you work.

Mid-year move

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

If you move between Colorado and Wyoming during the year, you file as a Colorado part-year resident: Form DR 0104 with the Part-Year Resident/Nonresident Tax Calculation Schedule, DR 0104PN.

While you lived in Colorado, all of your income from every source is taxable in Colorado. For the months you were not domiciled in Colorado, only income derived from Colorado sources is taxable there, so Wyoming wages after a move to Wyoming generate no Colorado tax.

Keep documentation of your move date, such as a lease or purchase agreement, updated driver license, voter registration and utility records. Give your employer an updated W-4 or DR 0004 promptly after the move so withholding matches your new situation.

Local taxes

Are there local income taxes in Colorado or Wyoming?

Colorado has no broad local income tax, but a few cities charge a monthly occupational privilege tax (OPT) on people who work in the city:

• Denver: $5.75 per month withheld from employees who earn at least $500 in a month for services in Denver.
• Greenwood Village: $2 per month from the employee (and $2 from the employer) when $250 or more is earned in a calendar month.
• Aurora: its OPT was repealed effective January 1, 2025.

These charges depend on where you work, not where you live, so a job performed in Wyoming does not trigger a Colorado city OPT. If you work from home in a Colorado city that has an OPT, ask the city's tax office whether home-based work counts. This is general information, not tax advice.