Tax Tips for U.S. Americans Abroad
Do U.S. expats need to file Colorado state taxes? Possibly. One thing for sure though, is that all U.S. Citizens and Greencard Holders are required to report their worldwide income to the IRS regardless of where they live and work (just see this post to learn more about that).
If you are no longer domiciled (meaning, you don’t consider yourself to have a permanent home in the states that you will return to if your job contract expires) read on. If you still are domiciled in Colorado, you will most likely need to file a state return every year!
Here’s a simple guide to determine whether you need to file Colorado state taxes:
Did you live in Colorado for any part of the year?
- Yes: You will need to file as Part-Year Resident, skip down below
- No: Continue on
Did you earn any Colorado sourced income during the year?
- Yes: File as Non-Resident, skip down below
- No: You don’t need to file
Points to Keep in Mind
Colorado residents must file a state tax return if they are required to file an income tax return with the IRS, even if they do not have a Colorado tax liability.
Additionally, income earned by an individual while they are not a resident of Colorado or Part-Year Resident will be taxed in Colorado only if it is considered Colorado source income.
Colorado Sourced Income
- Money/income earned while you worked physically in Colorado State (i.e. any income including normal salary from your non-US employer) while on a business trip to Colorado.
- Or income earned from physical property located in Colorado (i.e. rental income from your old Colorado home).
Other Colorado Income Sources to check out are here.
Colorado Specific Filing Details
Federal Filing Thresholds Apply (see Chart A)
- As a Part-Year Resident: You are taxed on all income received while a resident and only on income from Colorado sources while a nonresident.
- As a Non-Resident: You are taxed only on income from Colorado sources.
Expat Tax Benefits
Which expat tax benefits does Colorado State allow?
- Moving Expenses: No
- Foreign Earned Income Exclusion: Yes
- Foreign Tax Credit: No
A lot to process?
The information we shared on whether U.S. expats need to file Colorado state taxes is a lot. So don’t panic if you can’t understand it all! We at MyExpatTaxes can help you out with your state tax filings in an affordable way. Click here to sign up for our app, and get ready for a fun ride!