Local guides / Colorado / Colorado Springs
Freelancers in Colorado Springs, CO: taxes and retirement for 2026
For freelance designers, developers, writers and other 1099 professionals in Colorado Springs, CO. Colorado has a flat 4.4% state income tax for 2026. Here are the 2026 rules, a worked example and the official sources.
What's different in Colorado Springs
- Local income tax
- No city income tax in Colorado Springs.
- City of Colorado Springs sales and use tax
- Retailers doing business in the city must hold a city Sales & Use Tax License and collect the 3.07% city sales tax (in effect since Jan. 1, 2021). Colorado Springs collects its own tax, so returns are filed with the city through its GenTax portal rather than with the state.
- City business license
- No general business license; only the business types listed on the City Clerk's licensing site need one. Most home-based businesses do need a Home Occupation Permit from Planning and Development.
- Also worth knowing
- The city's Home Occupation Permit page tells home-based operators to check with the Sales Tax Division on whether a Sales Tax License is required (https://coloradosprings.gov/planning-and-development/page/home-occupation-permit). The 3.07% rate replaced 3.12% on Jan. 1, 2021, and the city lists it as current. The finding that the city has no occupational privilege tax relies on the Tax Foundation (a secondary source); no official statewide list of OPT cities was found. No city gig-worker ordinance was found.
Colorado rules for freelancers
- State income tax (2026)
- Colorado has a flat 4.4% state income tax for 2026. The statutory rate is 4.40% (Proposition 121, starting tax year 2022), and the 2026 DR 0104EP worksheet figures estimated tax at 4.4%. Under SB24-228 (tax years 2024 through 2034), the rate can be temporarily lowered for a tax year when TABOR surplus revenue passes set thresholds. The 2026 estimated tax form does not reflect any reduction for 2026.
- State estimated tax
- You generally must pay estimated tax if you expect to owe more than $1,000 in net Colorado tax for 2026 after withholding and credits. The required annual payment is the smaller of 70% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 federal AGI was over $150,000). Same dates as federal: April 15, June 15, and September 15, 2026, and January 15, 2027. Form DR 0104EP.
- Unemployment insurance independent contractor test (C.R.S. 8-70-115)
- A worker is presumed to be in covered employment unless shown to be free from control and direction and customarily engaged in an independent trade or business related to the work. A signed written contract with the statutory clauses and a bold disclosure (no unemployment benefits; contractor pays own income taxes) creates a rebuttable presumption of independent contractor status.
- Delivery network company driver protections (HB24-1129, C.R.S. 8-4-126)
- Since January 1, 2025, delivery apps must show drivers and customers what the customer paid and what the driver receives, along with delivery distances. They must pass through 100% of tips and cannot cut base pay because of a tip. They must also publish a written deactivation policy with a challenge process and give drivers at least 60 seconds to accept an offer.
- Transportation network company transparency (SB24-075, C.R.S. 8-4-127)
- Rideshare companies must tell drivers and riders what the rider paid and what the driver was paid. Since June 1, 2025, they must follow a written deactivation and suspension policy with a reconsideration process, and starting October 1, 2025, a state-certified driver support organization can represent drivers in deactivation and suspension cases.
- State retirement program
- Colorado SecureSavings is live. It is built around W-2 employers and does not cover 1099 contractors through the employer mandate; self-employed residents can enroll on their own.
Federal rules for 2026
Self-employment tax
On top of income tax, self-employed people pay 15.3% on 92.35% of net profit: 12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare with no cap. Half of it is deductible.
All income counts, form or no form
Clients and marketplaces send 1099-NEC or 1099-K forms only above IRS reporting thresholds, but every dollar of freelance income is taxable whether or not a form arrives.
Home office and tools
If you use part of your home regularly and only for work, the simplified home-office deduction is $5 per square foot up to 300 square feet. Software, equipment and a business share of your phone and internet are deductible too.
Quarterly estimated taxes
No one withholds tax from self-employment income, so you generally pay estimates four times a year if you expect to owe $1,000 or more. For 2026 income the federal dates are April 15, June 15 and September 15, 2026, and January 15, 2027. Paying 100% of last year's tax (110% if your AGI was over $150,000) in four equal installments avoids the underpayment penalty.
A worked example
| Self-employment tax | $12,010 |
|---|---|
| Self-employment tax per quarter | $3,003 |
| Solo 401(k) maximum | $40,299 |
| SEP IRA maximum | $15,799 |
Federal figures only. Income tax comes on top; the quarterly tax calculator estimates both. Computed from 2026 IRS limits (Notice 2025-67, Rev. Proc. 2025-32) and the SSA wage base.
Free tools
Guides by job and platform
Questions
Is there a local income tax in Colorado Springs?
No city income tax applies in Colorado Springs. Colorado has a flat 4.4% state income tax for 2026.
What local business taxes apply to self-employed freelancers in Colorado Springs?
City of Colorado Springs sales and use tax: Retailers doing business in the city must hold a city Sales & Use Tax License and collect the 3.07% city sales tax (in effect since Jan. 1, 2021). Colorado Springs collects its own tax, so returns are filed with the city through its GenTax portal rather than with the state.
Do I need a business license to freelance from home in Colorado Springs?
No general business license; only the business types listed on the City Clerk's licensing site need one. Most home-based businesses do need a Home Occupation Permit from Planning and Development.
Do freelancers in Colorado pay state income tax?
Colorado has a flat 4.4% state income tax for 2026. The statutory rate is 4.40% (Proposition 121, starting tax year 2022), and the 2026 DR 0104EP worksheet figures estimated tax at 4.4%. Under SB24-228 (tax years 2024 through 2034), the rate can be temporarily lowered for a tax year when TABOR surplus revenue passes set thresholds. The 2026 estimated tax form does not reflect any reduction for 2026.
When are Colorado estimated tax payments due for 2026?
You generally must pay estimated tax if you expect to owe more than $1,000 in net Colorado tax for 2026 after withholding and credits. The required annual payment is the smaller of 70% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 federal AGI was over $150,000). Same dates as federal: April 15, June 15, and September 15, 2026, and January 15, 2027. The state form is DR 0104EP.
What Colorado laws affect independent contractors and gig workers?
Unemployment insurance independent contractor test (C.R.S. 8-70-115): A worker is presumed to be in covered employment unless shown to be free from control and direction and customarily engaged in an independent trade or business related to the work. A signed written contract with the statutory clauses and a bold disclosure (no unemployment benefits; contractor pays own income taxes) creates a rebuttable presumption of independent contractor status. Delivery network company driver protections (HB24-1129, C.R.S. 8-4-126): Since January 1, 2025, delivery apps must show drivers and customers what the customer paid and what the driver receives, along with delivery distances. They must pass through 100% of tips and cannot cut base pay because of a tip. They must also publish a written deactivation policy with a challenge process and give drivers at least 60 seconds to accept an offer. Transportation network company transparency (SB24-075, C.R.S. 8-4-127): Rideshare companies must tell drivers and riders what the rider paid and what the driver was paid. Since June 1, 2025, they must follow a written deactivation and suspension policy with a reconsideration process, and starting October 1, 2025, a state-certified driver support organization can represent drivers in deactivation and suspension cases.
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Sources
- tax.colorado.gov/individual-income-tax-FAQ
- tax.colorado.gov/sites/tax/files/documents/DR_0104EP_2026.pdf
- cdle.colorado.gov/dlss
- cdle.colorado.gov/independent-contractors
- leg.colorado.gov/bills/hb24-1129
- leg.colorado.gov/bills/sb24-075
- taxfoundation.org/data/all/state/state-income-tax-rates-2026
- coloradosprings.gov/tax-applications-returns
- coloradosprings.gov/smallbiz
State and local facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.