Colorado Self-Employed Taxes in 2026
Colorado keeps things simple at the state level — one flat rate applied to your federal taxable income — but hides a local surprise most gig workers never see coming: the occupational privilege tax. If you earn money working in Denver, Aurora or a few other Front Range cities, you owe a small monthly OPT and you file it yourself as a 1099 worker. Get your full federal-plus-state number first in the [Colorado self-employed tax calculator](https://gigmytax.com/calculators/colorado-self-employed-tax).
Colorado's flat 4.25%: the simplest state math
Colorado's income tax starts from federal taxable income, multiplies by a flat 4.25% for 2026, and applies a short list of state additions and subtractions. That structure is a gift for gig workers: every deduction you claim federally — mileage at $0.70 per business mile, phone, home office, health premiums, half of your SE tax — automatically shrinks your Colorado bill too. There are no brackets to creep through and no separate state standard deduction to track.
What the flat rate means at $50,000 profit
After federal deductions, a typical $50,000-profit gig worker owes roughly $1,500 to $1,800 of Colorado tax — about 3.2% of profit in effective terms.
TABOR refunds
In strong revenue years Colorado returns money through TABOR mechanisms, sometimes as temporary rate cuts or refund tiers on the return.
Denver's occupational privilege tax: the local gotcha
Denver charges $5.75 per month on anyone who earns $500 or more in a month performing services in Denver — and unlike W-2 employees, whose employers remit it, a self-employed 1099 worker files and pays OPT directly. Aurora charges $2 per month with its own threshold, and Glendale, Greenwood Village and Sheridan have similar OPTs. The tax follows where you work, not where you live: a driver living in Colorado Springs who regularly delivers in Denver can owe Denver OPT. Colorado Springs, Boulder and Fort Collins levy no local income or occupational tax at all.
Worked example: a Denver Uber driver at $46,000 profit
Gross earnings of $62,000 with $16,000 of expenses (18,000 miles at $0.70 = $12,600, phone $900, car washes and supplies $800, tolls $1,700). Net profit $46,000. Self-employment tax on 92.35% ($42,481) is about $6,500, half deductible. Federal taxable income after the $16,100 standard deduction is roughly $26,650, giving about $2,950 of federal income tax. Colorado tax at 4.25% of that taxable income is about $1,130. Add roughly $69 of Denver OPT if you worked all twelve months in Denver. Total: about $10,650, or 23% of profit.
Colorado quarterly deadlines (DR 0104EP)
Colorado requires estimated payments if you expect to owe $1,000 or more of state tax, paid through Revenue Online or with Form DR 0104EP vouchers. Dates mirror the federal calendar: April 15, June 15, September 15, 2026, and January 15, 2027. You can fold both federal and state payments into one monthly transfer to a tax savings account — the [tax savings percentage calculator](https://gigmytax.com/calculators/tax-savings-percentage) sets the rate, and the [quarterly tax calculator](https://gigmytax.com/calculators/quarterly-tax) splits it into the four payments.
Deductions that matter most in Colorado
Because the state piggybacks on federal taxable income, deduction strategy is identical at both levels. Mileage dominates for drivers — 18,000 business miles is a $12,600 deduction worth roughly $535 of Colorado tax alone at the flat rate. Self-employed health insurance premiums, the deductible half of SE tax, and SEP IRA contributions all flow through. Stack them in the [tax deduction calculator](https://gigmytax.com/calculators/tax-deduction).
Frequently asked questions
+What is Colorado's income tax rate for self-employed people in 2026?
A flat 4.25% applied to federal taxable income, with small state adjustments. There are no brackets and no separate state standard deduction.
+What is Denver's occupational privilege tax for 1099 workers?
Denver charges $5.75 per month when you earn $500 or more working in Denver. Self-employed workers file and pay it themselves since no employer withholds it. Aurora, Glendale, Greenwood Village and Sheridan have similar taxes.
+Do Colorado Springs and Boulder have local income taxes?
No. Outside the occupational privilege tax cities, Colorado municipalities do not tax personal income. Sales tax licenses matter only if you sell taxable goods.
+When are Colorado estimated tax payments due in 2026?
April 15, June 15, September 15, 2026, and January 15, 2027 — the same dates as federal Form 1040-ES, paid via Revenue Online or Form DR 0104EP.
+How much should a Colorado gig worker set aside for taxes?
Between 24% and 30% of net profit covers federal income tax, 15.3% self-employment tax, and Colorado's flat 4.25% state rate.
+Is mileage deductible in Colorado?
Yes. Colorado starts from federal taxable income, so the $0.70 per business mile 2026 standard mileage rate reduces your state tax automatically.
About the author
Javed Niamat · Founder & Editor, GigTax
Javed Niamat founded GigTax to make self-employment tax math understandable for rideshare drivers, delivery couriers, creators and freelancers. He builds and maintains every calculator on this site and writes the guides that explain the numbers behind them.
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