Colorado Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

Colorado offers moderate tax benefits for veterans, with property tax exemptions for 100% disabled veterans and age-based income tax exemptions on military retirement. While not as generous as states like Arizona or Texas, Colorado's benefits—combined with mountain lifestyle and strong military community—make it worth considering if you can handle high housing costs and altitude.

Bottom Line Up Front

Here's what Colorado offers veterans:

Military retirement pay: Partial exemption based on age (under 55: $15K max; ages 55-64: $20K max; ages 65+: $24K max)
Property tax exemption: 50% exemption on first $200,000 of assessed value for 100% disabled veterans
VA disability pay: Completely tax-free (federal and state)
Vehicle registration: No special exemption for disabled veterans
Hunting/fishing: Discounted licenses for 100% disabled veterans

Potential annual savings for a 100% disabled veteran: $3,000-$5,000 depending on age, property value, and retirement income.

Reality check: Colorado's high cost of living (especially housing in Denver metro) can offset tax savings. You're choosing Colorado for lifestyle and mountains, not tax advantages.

Income Tax Treatment for Veterans

Military Retirement Pay - Partial Exemption (Age-Based)

Colorado offers age-based exemptions on military retirement, not the full exemption you'll find in Arizona, Texas, or Florida.

Under Age 55:

Maximum exemption: $15,000 (tax years 2022-2028)
On income above $15K, you pay Colorado's 4.40% flat tax

Ages 55-64:

Maximum exemption: $20,000
Applies to pension and annuity income (including military retirement)

Ages 65 and Older:

Maximum exemption: $24,000
Best tier for retirees

What this means in real dollars:

Example 1: E-7 with 20 years, $40,000/year retirement, age 45

Exempt: $15,000
Taxable in Colorado: $25,000
State tax owed: $1,100/year (vs. $0 in Arizona or Texas)

Example 2: E-7 with 20 years, $40,000/year retirement, age 60

Exempt: $20,000
Taxable in Colorado: $20,000
State tax owed: $880/year

Example 3: E-7 with 20 years, $40,000/year retirement, age 68

Exempt: $24,000
Taxable in Colorado: $16,000
State tax owed: $704/year

VA Disability Compensation - Tax-Free

All VA disability compensation is exempt from federal and state taxation. Whether you receive $171/month for a 10% rating or $4,000+/month for 100% with dependents, you won't pay a dime in taxes on it.

Active Duty Pay

Active-duty military pay is subject to Colorado income tax. Colorado does not exempt active-duty pay like some states do.

State Tax Rates (For Other Income)

Colorado operates on a flat income tax system:

Flat rate: 4.40% on all taxable income (as of 2024-2025)

This is higher than Arizona (2.5%) but lower than California (top rate 13.3%).

Standard deduction: Follows federal amounts - $13,850 (single), $27,700 (married) for 2025

Comparison to Neighboring States

State	Military Retirement	Income Tax Rate	Property Tax Exemption (100%)
Colorado	Partial (age-based, max $24K)	4.40% flat	50% of first $200K
Wyoming	N/A	No income tax	No veteran exemption
New Mexico	Partial ($10K exempt)	4.9-5.9%	Up to $4K assessed value
Utah	Partial exemption	4.65% flat	Varies by county
Kansas	Varies	3.1-5.7%	Varies by county
Nebraska	Partial ($5K-$15K)	2.46-5.84%	Up to $50K assessed value

Colorado sits in the middle - better than New Mexico, worse than Wyoming (no income tax) or Arizona (full military retirement exemption).

Property Tax Exemptions for Veterans

Disabled Veterans - 50% Exemption (100% Rating Required)

Colorado offers a property tax exemption for 100% disabled veterans, structured as a 50% reduction on the first $200,000 of home value.

Eligibility requirements (as of 2025):

100% service-connected disability rated by the VA, OR
Individual Unemployability (TDIU) status (expanded in 2025 via Amendment G)

Important: Unlike some states, a 50%, 70%, or 90% disability rating does NOT qualify. You must be rated 100% P&T or have TDIU.

Real-World Examples

100% Disabled Veteran in Colorado Springs

Home value: $450,000
Assessed value (7.15% of actual value): $32,175
Property tax rate: ~0.46% (El Paso County average)
Property tax without exemption: ~$148/year on assessed value
With 50% exemption on first $200K: Reduces assessed value to $16,088
Annual savings: ~$74 (limited because assessed value caps benefit)

100% Disabled Veteran in Denver

Home value: $600,000
Assessed value: $42,900 (7.15% rate)
Property tax rate: ~0.55% (Denver average)
Property tax without exemption: ~$236/year
With 50% exemption: Reduces to ~$118
Annual savings: ~$118

100% Disabled Veteran in Aurora

Home value: $500,000
Assessed value: $35,750
Property tax rate: ~0.52%
Property tax without exemption: ~$186/year
With exemption: ~$93
Annual savings: ~$93

Reality check: Colorado's property tax exemption is significantly less valuable than states like Alabama (full exemption) or Arizona (direct dollar reduction). Colorado's residential assessment rate is very low (7.15%), which reduces both the tax burden AND the exemption value.

How Colorado's Exemption Works

Colorado uses a 50% reduction on the first $200,000 of actual home value:

Take 50% of first $200,000 = $100,000 reduction
Apply to actual value before assessment
Then apply the 7.15% assessment rate
Finally apply local mill levy (property tax rate)

This structure means the benefit is modest compared to other states.

Income Limits

2025 income limits:

Maximum household income: $86,700 (adjusted annually)
Includes wages, interest, dividends, business income
Does NOT include: Social Security, VA disability compensation, certain pensions

This is more generous than Arizona's $38,843 limit.

Application Process and Deadlines

Application period: Varies by county, typically January through mid-February

Required documents:

VA disability rating letter showing 100% P&T or TDIU
DD-214 showing honorable discharge
Colorado driver's license or state ID
Property deed
Income verification (W-2s, 1099s, tax return)

Where to apply: Your county assessor's office

County assessor offices (major counties):

Denver County: (720) 913-4159
El Paso County (Colorado Springs): (719) 520-6600
Arapahoe County: (303) 795-4600
Jefferson County: (303) 271-8600
Adams County: (720) 523-6038
Boulder County: (303) 441-3530
Larimer County (Fort Collins): (970) 498-7050

Processing time: Applications must be filed annually. You'll receive confirmation for the current tax year.

Important: You must reapply every year. Unlike some states, this is NOT a one-time application.

2024 Amendment G Expansion

Colorado voters approved Amendment G in November 2024, expanding eligibility to veterans with Individual Unemployability (TDIU) status starting with the 2025 tax year (taxes paid in 2026).

This means veterans rated 60% or higher who receive 100% compensation due to unemployability now qualify.

Vehicle Registration Benefits

No Special Exemption for 100% Disabled Veterans

Unlike Arizona, Texas, or Alabama, Colorado does not offer vehicle registration fee exemptions for 100% disabled veterans.

What you'll pay (Colorado standard rates):

Registration fees: $7-$75+ depending on vehicle age and weight
Specific ownership tax: Based on vehicle value, decreases over time
No discounts for disabled veterans

Annual cost: $100-$400+ depending on vehicle value

This is a notable disadvantage compared to states with veteran vehicle exemptions.

Disabled Veteran License Plates

Colorado offers specialized license plates for disabled veterans:

Disabled Veteran (DV) plates
Purple Heart plates
Medal of Honor plates
Former POW plates

Fee: Standard registration fees apply (no discount)

Parking benefit: DV plates allow parking in disabled parking spaces (must also have disability placard or documentation)

Other Financial Benefits

Hunting and Fishing Licenses

Colorado offers reduced-cost hunting and fishing licenses for disabled veterans:

100% Permanently and Totally Disabled Veterans:

Annual Fishing License: $10 (vs. $36 resident)
Small Game License: $21 (vs. $36 resident)
Combination license packages: Various discounts

Important: Not free like Arizona, but significant savings

Application: Purchase through Colorado Parks and Wildlife with proof of 100% P&T rating

Contact: Colorado Parks and Wildlife Phone: (303) 297-1192 Website: cpw.state.co.us

State Parks

Colorado Aspen Annual Parks Pass - Free for 100% disabled veterans

Cost: Free (normally $120/year)
Benefits: Unlimited admission to 42+ Colorado State Parks
Eligibility: 100% service-connected disabled veterans

This is one of Colorado's best veteran benefits - free access to world-class outdoor recreation.

Application: Apply online or at any Colorado State Park with VA rating letter

Sales Tax

Colorado does not offer general sales tax exemptions for veterans. Combined state and average local sales tax is approximately 7.8% (varies by locality).

Some counties (like Denver at 8.81%) have higher rates.

Financial Impact Analysis

Let's calculate the 20-year financial impact for a 100% disabled veteran retiring in Colorado vs. other states.

Scenario: E-7 Retiree, 20 Years Service, 100% Disabled, Age 65

Annual income:

Military retirement: $40,000
VA disability: $45,000 (100% with dependents)
Total: $85,000

Home: $500,000 (median for Denver metro area) Vehicle: $35,000

Colorado Savings Over 20 Years

Benefit	Annual Savings	20-Year Total
Property tax exemption (50%)	~$100	$2,000
Military retirement tax (vs 5% state)	$640 ($24K exempt × 4.40% saved vs full taxation)	$12,800
State parks pass	$120	$2,400
Hunting/fishing license	$40	$800
TOTAL	~$900	$18,000

Additional costs to consider:

Still paying $704/year on military retirement ($16K taxable at 4.40%)
No vehicle registration exemption ($200-400/year ongoing cost)

Comparison: Colorado vs. Arizona (Same Scenario)

State	Property Tax Savings	Income Tax Savings	Vehicle Savings	Total 20-Year Savings
Colorado	$2,000	$12,800	$0	$18,000
Arizona	$94,960	$40,000 (full exemption)	$9,000	$147,160

Arizona advantage: $129,160 over 20 years

Colorado's tax benefits are significantly less generous than Arizona, Texas, or Florida. You're choosing Colorado for lifestyle, not tax savings.

How to Claim Your Benefits

Step 1: Property Tax Exemption

Timeline: Apply January-February (varies by county) annually

Required documents:

VA rating decision letter showing 100% P&T or TDIU
DD-214 showing honorable discharge
Colorado driver's license
Property deed or tax statement
Income verification (tax return, W-2s, 1099s)
Completed exemption application (from county assessor)

Where to apply: Your county assessor's office

Processing time: Processed for current tax year

Critical deadline: Typically mid-February - check with your county. This application is required every year.

Step 2: State Parks Pass

Where: Apply online at cpw.state.co.us or at any Colorado State Park

Documents needed:

VA rating letter showing 100% service-connected disability
Colorado ID or driver's license
Completed application

Processing: Immediate at parks, 2-3 weeks online

Step 3: Hunting/Fishing License

Where: Purchase online at cpw.state.co.us, any license agent, or Colorado Parks and Wildlife office

Documents needed:

VA rating letter showing 100% P&T
Colorado ID or driver's license

Contact: Colorado Parks and Wildlife Phone: (303) 297-1192

Frequently Asked Questions

Do I need to reapply for the property tax exemption every year?

Yes. Colorado requires annual applications. You must file between January and mid-February each year (exact dates vary by county).

What if I'm rated 90% or 70%?

You do not qualify for the property tax exemption unless you're 100% P&T or have TDIU (Individual Unemployability) status. This is a major limitation compared to states like Arizona that offer prorated exemptions.

You still benefit from:

Partial income tax exemption on military retirement (age-based)
Tax-free VA disability compensation
Discounted hunting/fishing licenses (50% disabled qualifies for some discounts)

Can I get the property tax exemption if I exceed the income limits?

No. The income limit is $86,700 for 2025. However, Social Security, VA disability compensation, and certain pension income do NOT count toward this limit, making it easier to qualify than the dollar amount suggests.

Does TDIU count as 100% for the property tax exemption?

Yes, as of 2025 thanks to Amendment G. Veterans with Individual Unemployability status now qualify for the same 50% property tax exemption as veterans rated 100% P&T.

Are military retirement benefits taxed if I move to Colorado from another state?

Yes, subject to the age-based partial exemption:

Under 55: $15K exempt, rest taxed at 4.40%
Ages 55-64: $20K exempt
Ages 65+: $24K exempt

This applies regardless of where you served or previously lived.

Do I need to be retired from the military to get these benefits?

Property tax exemption: No, only need 100% VA rating or TDIU
Income tax exemption on military retirement: Yes, must be receiving military retirement pay
State parks pass: No, only need 100% disability rating
Hunting/fishing discount: No, only need VA disability rating

What if my county denies my exemption application?

Contact:

Colorado Division of Veterans Affairs: (303) 284-6077
County assessor's office (request appeals process)
Veteran Service Officers: Available through Colorado DVA

Does Colorado tax my TSP or 401(k) withdrawals?

Yes, at Colorado's 4.40% flat rate. Qualified retirement account withdrawals (other than military retirement pension) are taxed as regular income.

However, Colorado offers a pension/annuity subtraction for ages 55-64 ($20K max) and 65+ ($24K max) that may apply to some retirement account distributions.

Will these benefits affect my federal taxes?

No. Property tax exemptions and state income tax exemptions don't impact your federal tax liability. Military retirement and VA disability compensation remain tax-free at the federal level.

What happens if I sell my home and buy another in Colorado?

You'll need to reapply for the exemption at your new property. Since you must apply annually anyway, ensure you file by your county's deadline (typically mid-February) after purchasing.

Can I claim the exemption on a second home or rental property?

No. The exemption applies only to your primary residence where you live.

How does Colorado's cost of living affect the value of these benefits?

Reality check: Colorado's high cost of living—especially housing in Denver metro ($585K+ median)—can easily erase tax savings.

Example: Moving from Texas (no income tax, affordable housing) to Denver:

You'll pay $700-1,100/year in state income tax on military retirement
Housing costs $200K-300K more
Property tax exemption saves only ~$100/year

Bottom line: Choose Colorado for lifestyle (mountains, outdoor recreation, four seasons), not tax benefits. The tax savings are modest at best.

What's the best age to retire to Colorado for tax purposes?

Age 65+ offers the maximum benefit:

$24K military retirement exemption (vs. $15K under 55)
Medicare eligibility reduces healthcare costs
Senior property tax programs (beyond veteran exemption)

However, altitude concerns increase with age - discuss with your doctor before moving to 5,000+ feet elevation.

Key Takeaways

Colorado delivers moderate financial value for veterans:

100% disabled veterans save $900-1,500 annually through combined benefits (modest compared to other states)
Military retirees age 65+ get the best deal with $24K exemption on retirement income
Younger veterans (under 55) pay more state taxes than in Arizona, Texas, or Florida
Property tax exemption is weak compared to other states - only ~$100/year savings due to low assessment rate
No vehicle registration exemption - a notable disadvantage

Colorado's real benefits:

Outstanding outdoor recreation (free state parks pass for 100% disabled)
Strong military community (Colorado Springs, Denver)
Quality of life and four-season climate
Growing defense contractor job market

Choose Colorado for: Mountains, outdoor lifestyle, military community, defense jobs Don't choose Colorado for: Tax savings (Arizona, Texas, Florida are far better)

If you're 100% P&T and haven't applied for property tax exemption, do it in January 2025 - but don't expect huge savings. The real value of living in Colorado is lifestyle, not tax breaks.

Resources

Colorado Division of Veterans Affairs: (303) 284-6077 | vets.colorado.gov
Property Tax Exemption Info: Contact your county assessor's office
Colorado Parks & Wildlife: (303) 297-1192 | cpw.state.co.us
Colorado Revised Statutes (Veteran Benefits): leg.colorado.gov
Veterans Benefits Guide: Download at vets.colorado.gov

Information current as of January 2025. Tax laws and benefit amounts may change. Verify specific details with your county assessor's office and the Colorado Division of Veterans Affairs.

Colorado Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

Bottom Line Up Front

Here's what Colorado offers veterans:

Military retirement pay: Partial exemption based on age (under 55: $15K max; ages 55-64: $20K max; ages 65+: $24K max)
Property tax exemption: 50% exemption on first $200,000 of assessed value for 100% disabled veterans
VA disability pay: Completely tax-free (federal and state)
Vehicle registration: No special exemption for disabled veterans
Hunting/fishing: Discounted licenses for 100% disabled veterans

Potential annual savings for a 100% disabled veteran: $3,000-$5,000 depending on age, property value, and retirement income.

Reality check: Colorado's high cost of living (especially housing in Denver metro) can offset tax savings. You're choosing Colorado for lifestyle and mountains, not tax advantages.

Income Tax Treatment for Veterans

Military Retirement Pay - Partial Exemption (Age-Based)

Colorado offers age-based exemptions on military retirement, not the full exemption you'll find in Arizona, Texas, or Florida.

Under Age 55:

Maximum exemption: $15,000 (tax years 2022-2028)
On income above $15K, you pay Colorado's 4.40% flat tax

Ages 55-64:

Maximum exemption: $20,000
Applies to pension and annuity income (including military retirement)

Ages 65 and Older:

Maximum exemption: $24,000
Best tier for retirees

What this means in real dollars:

Example 1: E-7 with 20 years, $40,000/year retirement, age 45

Exempt: $15,000
Taxable in Colorado: $25,000
State tax owed: $1,100/year (vs. $0 in Arizona or Texas)

Example 2: E-7 with 20 years, $40,000/year retirement, age 60

Exempt: $20,000
Taxable in Colorado: $20,000
State tax owed: $880/year

Example 3: E-7 with 20 years, $40,000/year retirement, age 68

Exempt: $24,000
Taxable in Colorado: $16,000
State tax owed: $704/year

VA Disability Compensation - Tax-Free

Active Duty Pay

Active-duty military pay is subject to Colorado income tax. Colorado does not exempt active-duty pay like some states do.

State Tax Rates (For Other Income)

Colorado operates on a flat income tax system:

Flat rate: 4.40% on all taxable income (as of 2024-2025)

This is higher than Arizona (2.5%) but lower than California (top rate 13.3%).

Standard deduction: Follows federal amounts - $13,850 (single), $27,700 (married) for 2025

Comparison to Neighboring States

State	Military Retirement	Income Tax Rate	Property Tax Exemption (100%)
Colorado	Partial (age-based, max $24K)	4.40% flat	50% of first $200K
Wyoming	N/A	No income tax	No veteran exemption
New Mexico	Partial ($10K exempt)	4.9-5.9%	Up to $4K assessed value
Utah	Partial exemption	4.65% flat	Varies by county
Kansas	Varies	3.1-5.7%	Varies by county
Nebraska	Partial ($5K-$15K)	2.46-5.84%	Up to $50K assessed value

Colorado sits in the middle - better than New Mexico, worse than Wyoming (no income tax) or Arizona (full military retirement exemption).

Property Tax Exemptions for Veterans

Disabled Veterans - 50% Exemption (100% Rating Required)

Colorado offers a property tax exemption for 100% disabled veterans, structured as a 50% reduction on the first $200,000 of home value.

Eligibility requirements (as of 2025):

100% service-connected disability rated by the VA, OR
Individual Unemployability (TDIU) status (expanded in 2025 via Amendment G)

Important: Unlike some states, a 50%, 70%, or 90% disability rating does NOT qualify. You must be rated 100% P&T or have TDIU.

Real-World Examples

100% Disabled Veteran in Colorado Springs

Home value: $450,000
Assessed value (7.15% of actual value): $32,175
Property tax rate: ~0.46% (El Paso County average)
Property tax without exemption: ~$148/year on assessed value
With 50% exemption on first $200K: Reduces assessed value to $16,088
Annual savings: ~$74 (limited because assessed value caps benefit)

100% Disabled Veteran in Denver

Home value: $600,000
Assessed value: $42,900 (7.15% rate)
Property tax rate: ~0.55% (Denver average)
Property tax without exemption: ~$236/year
With 50% exemption: Reduces to ~$118
Annual savings: ~$118

100% Disabled Veteran in Aurora

Home value: $500,000
Assessed value: $35,750
Property tax rate: ~0.52%
Property tax without exemption: ~$186/year
With exemption: ~$93
Annual savings: ~$93

How Colorado's Exemption Works

Colorado uses a 50% reduction on the first $200,000 of actual home value:

Take 50% of first $200,000 = $100,000 reduction
Apply to actual value before assessment
Then apply the 7.15% assessment rate
Finally apply local mill levy (property tax rate)

This structure means the benefit is modest compared to other states.

Income Limits

2025 income limits:

Maximum household income: $86,700 (adjusted annually)
Includes wages, interest, dividends, business income
Does NOT include: Social Security, VA disability compensation, certain pensions

This is more generous than Arizona's $38,843 limit.

Application Process and Deadlines

Application period: Varies by county, typically January through mid-February

Required documents:

VA disability rating letter showing 100% P&T or TDIU
DD-214 showing honorable discharge
Colorado driver's license or state ID
Property deed
Income verification (W-2s, 1099s, tax return)

Where to apply: Your county assessor's office

County assessor offices (major counties):

Denver County: (720) 913-4159
El Paso County (Colorado Springs): (719) 520-6600
Arapahoe County: (303) 795-4600
Jefferson County: (303) 271-8600
Adams County: (720) 523-6038
Boulder County: (303) 441-3530
Larimer County (Fort Collins): (970) 498-7050

Processing time: Applications must be filed annually. You'll receive confirmation for the current tax year.

Important: You must reapply every year. Unlike some states, this is NOT a one-time application.

2024 Amendment G Expansion

Colorado voters approved Amendment G in November 2024, expanding eligibility to veterans with Individual Unemployability (TDIU) status starting with the 2025 tax year (taxes paid in 2026).

This means veterans rated 60% or higher who receive 100% compensation due to unemployability now qualify.

Vehicle Registration Benefits

No Special Exemption for 100% Disabled Veterans

Unlike Arizona, Texas, or Alabama, Colorado does not offer vehicle registration fee exemptions for 100% disabled veterans.

What you'll pay (Colorado standard rates):

Registration fees: $7-$75+ depending on vehicle age and weight
Specific ownership tax: Based on vehicle value, decreases over time
No discounts for disabled veterans

Annual cost: $100-$400+ depending on vehicle value

This is a notable disadvantage compared to states with veteran vehicle exemptions.

Disabled Veteran License Plates

Colorado offers specialized license plates for disabled veterans:

Disabled Veteran (DV) plates
Purple Heart plates
Medal of Honor plates
Former POW plates

Fee: Standard registration fees apply (no discount)

Parking benefit: DV plates allow parking in disabled parking spaces (must also have disability placard or documentation)

Other Financial Benefits

Hunting and Fishing Licenses

Colorado offers reduced-cost hunting and fishing licenses for disabled veterans:

100% Permanently and Totally Disabled Veterans:

Annual Fishing License: $10 (vs. $36 resident)
Small Game License: $21 (vs. $36 resident)
Combination license packages: Various discounts

Important: Not free like Arizona, but significant savings

Application: Purchase through Colorado Parks and Wildlife with proof of 100% P&T rating

Contact: Colorado Parks and Wildlife Phone: (303) 297-1192 Website: cpw.state.co.us

State Parks

Colorado Aspen Annual Parks Pass - Free for 100% disabled veterans

Cost: Free (normally $120/year)
Benefits: Unlimited admission to 42+ Colorado State Parks
Eligibility: 100% service-connected disabled veterans

This is one of Colorado's best veteran benefits - free access to world-class outdoor recreation.

Application: Apply online or at any Colorado State Park with VA rating letter

Sales Tax

Colorado does not offer general sales tax exemptions for veterans. Combined state and average local sales tax is approximately 7.8% (varies by locality).

Some counties (like Denver at 8.81%) have higher rates.

Financial Impact Analysis

Let's calculate the 20-year financial impact for a 100% disabled veteran retiring in Colorado vs. other states.

Scenario: E-7 Retiree, 20 Years Service, 100% Disabled, Age 65

Annual income:

Military retirement: $40,000
VA disability: $45,000 (100% with dependents)
Total: $85,000

Home: $500,000 (median for Denver metro area) Vehicle: $35,000

Colorado Savings Over 20 Years

Benefit	Annual Savings	20-Year Total
Property tax exemption (50%)	~$100	$2,000
Military retirement tax (vs 5% state)	$640 ($24K exempt × 4.40% saved vs full taxation)	$12,800
State parks pass	$120	$2,400
Hunting/fishing license	$40	$800
TOTAL	~$900	$18,000

Additional costs to consider:

Still paying $704/year on military retirement ($16K taxable at 4.40%)
No vehicle registration exemption ($200-400/year ongoing cost)

Comparison: Colorado vs. Arizona (Same Scenario)

State	Property Tax Savings	Income Tax Savings	Vehicle Savings	Total 20-Year Savings
Colorado	$2,000	$12,800	$0	$18,000
Arizona	$94,960	$40,000 (full exemption)	$9,000	$147,160

Arizona advantage: $129,160 over 20 years

Colorado's tax benefits are significantly less generous than Arizona, Texas, or Florida. You're choosing Colorado for lifestyle, not tax savings.

How to Claim Your Benefits

Step 1: Property Tax Exemption

Timeline: Apply January-February (varies by county) annually

Required documents:

VA rating decision letter showing 100% P&T or TDIU
DD-214 showing honorable discharge
Colorado driver's license
Property deed or tax statement
Income verification (tax return, W-2s, 1099s)
Completed exemption application (from county assessor)

Where to apply: Your county assessor's office

Processing time: Processed for current tax year

Critical deadline: Typically mid-February - check with your county. This application is required every year.

Step 2: State Parks Pass

Where: Apply online at cpw.state.co.us or at any Colorado State Park

Documents needed:

VA rating letter showing 100% service-connected disability
Colorado ID or driver's license
Completed application

Processing: Immediate at parks, 2-3 weeks online

Step 3: Hunting/Fishing License

Where: Purchase online at cpw.state.co.us, any license agent, or Colorado Parks and Wildlife office

Documents needed:

VA rating letter showing 100% P&T
Colorado ID or driver's license

Contact: Colorado Parks and Wildlife Phone: (303) 297-1192

Frequently Asked Questions

Do I need to reapply for the property tax exemption every year?

Yes. Colorado requires annual applications. You must file between January and mid-February each year (exact dates vary by county).

What if I'm rated 90% or 70%?

You still benefit from:

Partial income tax exemption on military retirement (age-based)
Tax-free VA disability compensation
Discounted hunting/fishing licenses (50% disabled qualifies for some discounts)

Can I get the property tax exemption if I exceed the income limits?

Does TDIU count as 100% for the property tax exemption?

Yes, as of 2025 thanks to Amendment G. Veterans with Individual Unemployability status now qualify for the same 50% property tax exemption as veterans rated 100% P&T.

Are military retirement benefits taxed if I move to Colorado from another state?

Yes, subject to the age-based partial exemption:

Under 55: $15K exempt, rest taxed at 4.40%
Ages 55-64: $20K exempt
Ages 65+: $24K exempt

This applies regardless of where you served or previously lived.

Do I need to be retired from the military to get these benefits?

Property tax exemption: No, only need 100% VA rating or TDIU
Income tax exemption on military retirement: Yes, must be receiving military retirement pay
State parks pass: No, only need 100% disability rating
Hunting/fishing discount: No, only need VA disability rating

What if my county denies my exemption application?

Contact:

Colorado Division of Veterans Affairs: (303) 284-6077
County assessor's office (request appeals process)
Veteran Service Officers: Available through Colorado DVA

Does Colorado tax my TSP or 401(k) withdrawals?

Yes, at Colorado's 4.40% flat rate. Qualified retirement account withdrawals (other than military retirement pension) are taxed as regular income.

However, Colorado offers a pension/annuity subtraction for ages 55-64 ($20K max) and 65+ ($24K max) that may apply to some retirement account distributions.

Will these benefits affect my federal taxes?

No. Property tax exemptions and state income tax exemptions don't impact your federal tax liability. Military retirement and VA disability compensation remain tax-free at the federal level.

What happens if I sell my home and buy another in Colorado?

You'll need to reapply for the exemption at your new property. Since you must apply annually anyway, ensure you file by your county's deadline (typically mid-February) after purchasing.

Can I claim the exemption on a second home or rental property?

No. The exemption applies only to your primary residence where you live.

How does Colorado's cost of living affect the value of these benefits?

Reality check: Colorado's high cost of living—especially housing in Denver metro ($585K+ median)—can easily erase tax savings.

Example: Moving from Texas (no income tax, affordable housing) to Denver:

You'll pay $700-1,100/year in state income tax on military retirement
Housing costs $200K-300K more
Property tax exemption saves only ~$100/year

Bottom line: Choose Colorado for lifestyle (mountains, outdoor recreation, four seasons), not tax benefits. The tax savings are modest at best.

What's the best age to retire to Colorado for tax purposes?

Age 65+ offers the maximum benefit:

$24K military retirement exemption (vs. $15K under 55)
Medicare eligibility reduces healthcare costs
Senior property tax programs (beyond veteran exemption)

However, altitude concerns increase with age - discuss with your doctor before moving to 5,000+ feet elevation.

Key Takeaways

Colorado delivers moderate financial value for veterans:

100% disabled veterans save $900-1,500 annually through combined benefits (modest compared to other states)
Military retirees age 65+ get the best deal with $24K exemption on retirement income
Younger veterans (under 55) pay more state taxes than in Arizona, Texas, or Florida
Property tax exemption is weak compared to other states - only ~$100/year savings due to low assessment rate
No vehicle registration exemption - a notable disadvantage

Colorado's real benefits:

Outstanding outdoor recreation (free state parks pass for 100% disabled)
Strong military community (Colorado Springs, Denver)
Quality of life and four-season climate
Growing defense contractor job market

Choose Colorado for: Mountains, outdoor lifestyle, military community, defense jobs Don't choose Colorado for: Tax savings (Arizona, Texas, Florida are far better)

If you're 100% P&T and haven't applied for property tax exemption, do it in January 2025 - but don't expect huge savings. The real value of living in Colorado is lifestyle, not tax breaks.

Resources

Colorado Division of Veterans Affairs: (303) 284-6077 | vets.colorado.gov
Property Tax Exemption Info: Contact your county assessor's office
Colorado Parks & Wildlife: (303) 297-1192 | cpw.state.co.us
Colorado Revised Statutes (Veteran Benefits): leg.colorado.gov
Veterans Benefits Guide: Download at vets.colorado.gov

Information current as of January 2025. Tax laws and benefit amounts may change. Verify specific details with your county assessor's office and the Colorado Division of Veterans Affairs.