Colorado · Rental Property Depreciation
Rental Property Depreciation in Colorado (2026)
Depreciate rental property improvements over 27.5 years. Colorado has a flat 4.4% income tax, so a Colorado filer's combined marginal rate on the next dollar at $82,254 of income is about 26.4% (22% federal + 4.4% CO).
2026 savings example for Colorado
Planning estimate for a single filer earning $82,254 (Colorado median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; CO tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$1,320
Federal savings
$1,100
$9,266 → $8,166 · 22% bracket
CO state savings
$220
$2,959 → $2,739 · 4.4% marginal
Combined marginal rate
26.4%
≈ $264 saved per $1,000 deducted
Federal × Colorado marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The CO column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | CO marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 4.4% | 14.4% | $144 |
| 12% | $28,500 - $66,500 | 4.4% | 16.4% | $164 |
| 22% | $66,500 - $121,800 | 4.4% | 26.4% | $264 |
| 24% | $121,800 - $217,875 | 4.4% | 28.4% | $284 |
| 32% | $217,875 - $272,325 | 4.4% | 36.4% | $364 |
| 35% | $272,325 - $656,700 | 4.4% | 39.4% | $394 |
| 37% | Over $656,700 | 4.4% | 41.4% | $414 |
Eligibility & forms
Rental property owners
- Must own rental property
- 27.5 year schedule
- Placed in service
Federal forms: Form 4562, Schedule E
Colorado filing notes
Federal deductions automatically apply. Watch for TABOR refund checks (taxable federally). Colorado offers retirement income subtractions for 55+ and generous renewable energy credits.
Common mistakes: Not claiming depreciation; Wrong recovery period.
Frequently asked questions
How much can the Rental Property Depreciation save a Colorado taxpayer in 2026?
In LevyIO's example, a single filer with $82,254 of income (the Colorado median household income in our state dataset) who removes $5,000 from taxable income saves about $1,100 in 2026 federal tax (22% marginal bracket) plus about $220 in Colorado tax (4.4% state marginal rate), roughly $1,320 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's CO bracket data, not a survey figure.
What is the Colorado income tax rate for 2026?
Colorado has a flat 4.4% income tax. The CO standard deduction in LevyIO's dataset is $15,000 single / $30,000 married. Flat 4.4%. Uses federal taxable income. TABOR mandates refunds when revenue exceeds limits.
Who qualifies for the Rental Property Depreciation in Colorado?
Rental property owners. The federal rules are the same in every state; the requirements are: Must own rental property; 27.5 year schedule; Placed in service. Colorado filers should confirm on the CO return whether the state follows the federal treatment.
Which forms do I file to claim the Rental Property Depreciation?
Federal: Form 4562, Schedule E. Colorado: check the Colorado Department of Revenue instructions for the matching state schedule. Common mistakes: Not claiming depreciation; Wrong recovery period.
Rental Property Depreciation in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.