Gambling winnings tax in Colorado

Colorado allows gambling losses only if you itemize on your federal return. It caps your whole deduction, gambling losses included, at $1,000, or $2,000 on a joint return, once federal adjusted gross income reaches $300,000, and a win alone can carry you there. Whether only 90 percent of your losses count from 2026 is not settled.

Checked against Colorado’s own sources on 2026-09-25.

In short

Colorado withholds 4 percent from winnings that are subject to federal withholding, but the tax rate is 4.4 percent. If you rely on the W-2G withholding, you will owe more when you file.12, 11
For tax years from 2026, at federal AGI of $300,000 or more, Colorado cuts your whole deduction, standard or itemized, to $1,000 single or $2,000 joint.5
If you are 55 to 64 and get Social Security, a win that takes your federal AGI over $75,000, or $95,000 joint, limits your subtraction to at most $20,000 a person.2, 1

How Colorado treats gambling losses

3, 4, 5, 6, 9, 11

Colorado allows the deduction only to filers who itemize on the federal return. Take the federal standard deduction and the offset disappears, so gross winnings are taxed even in a year you finished down.

The two examples below are the same numbers the calculator uses, worked at Colorado rates.

Two examples, worked at 2026 Colorado rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
Colorado: $849
Total: $4,445

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. Colorado allows the loss deduction only to filers who itemize federally, which you do. Your Colorado income, after the deduction your federal return takes, because Colorado starts from federal taxable income, goes from $43,900 without the win to $63,200 with it. The extra $19,300 is taxed at 4.4 percent, which comes to $849.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
Colorado: $2,200
Total: $12,550

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. Colorado allows the loss deduction only to filers who itemize federally, and you do not. Your Colorado income, after the deduction your federal return takes, because Colorado starts from federal taxable income, goes from $43,900 without the win to $93,900 with it. The extra $50,000 is taxed at 4.4 percent, which comes to $2,200.

Colorado income tax rates, 2026

4, 9, 11, 14, 15, 16

Taxable income	Rate
$0 and above	4.4 percent

Withholding on winnings

9, 10, 12

Colorado withholds 4 percent. The payout that triggers it depends on the wager, and the lowest trigger is $5,000. The rules in the state's sources:

the state lottery and other lotteries, sweepstakes and wagering pools: above $5,000, measured after the stake comes off (Colorado states no figure of its own and withholds where federal withholding applies).
pari-mutuel wagering, other wagers and sports wagering: above $5,000, and only where the payout is at least 300 times the stake, measured after the stake comes off.
slot machines, keno and bingo: nothing is withheld under the regular rules, though backup withholding can apply where you give no taxpayer identification number.

These sources give no rule for other kinds of bet, so do not assume tax was withheld on one.

Withholding is a credit against the bill, not the bill itself. It does not settle what you owe.

The federal 90 percent loss limit in Colorado

4, 7, 17

From tax year 2026 the federal deduction for gambling losses is cut to 90 percent of what you lost, and never more than what you won. Public Law 119-21 did it, at section 70114(a), by rewriting 26 U.S.C. 165(d).

Colorado has not said whether the federal 90 percent limit applies. Its own law measures the state deduction by the federal figure, so the limit can arrive without Colorado doing anything. Colorado follows the federal code as it changes.

Our estimate assumes the limit applies, which gives the higher tax. The calculator also shows the tax if the limit does not apply. We would rather tell you the number could be lower than let you plan around one that turns out to be too low.

If you do not live in Colorado

8, 13

A nonresident is taxed on Colorado source income. Department guidance says that income from gambling and games of chance conducted in Colorado, including limited stakes gambling, bingo, raffles, the Colorado Lottery, sweepstakes and door prizes, is Colorado source income whether or not the nonresident was in Colorado when the wager was placed or the prize was paid. C.R.S. 39-22-109(1) then apportions the tax by the ratio of Colorado source federal adjusted gross income to total federal adjusted gross income. Gambling losses are a federal itemized deduction and never enter adjusted gross income, so they do not reduce the Colorado source income in that ratio. A nonresident files the DR 0104PN with the DR 0104.

The calculator works the bill for somebody who lives in Colorado. It does not apportion income between states, so a nonresident return is not what the figure above describes.

More about Colorado

Withholding

Colorado withholds 4 percent from winnings that are subject to federal withholding, but the tax rate is 4.4 percent. If you rely on the W-2G withholding, you will owe more when you file, even before the deduction limit.12, 11

The deduction limit from 2026

For tax years from 2026, at federal AGI of $300,000 or more, Colorado cuts your whole deduction, standard or itemized, to $1,000 single or $2,000 joint.5

The statute applies the limit at federal AGI equal to or more than $300,000. The 2025 DR 0104 booklet and the January 2026 guide say more than $300,000.5, 3, 11

If you file married filing separately or head of household, it is not confirmed which limit applies to you. The statute and the 2026 guide name only single and joint returns, and the 2026 booklet is not published. The 2025 booklet put those filers on the single figure.5, 3, 11

If you get Social Security

From 2025, if you are 55 to 64, you can subtract all your taxable Social Security only while federal AGI is $75,000 or less, or $95,000 joint. Above that, you can subtract at most $20,000 a person (DR 0104AD lines 3 and 5).2, 1

The act says $75,000 "if filing individually". The 2025 booklet names only single and joint, so it is not certain which line applies if you file married filing separately or head of household.1, 2

If you are 65 or older, you can subtract your taxable Social Security in full at any income.2

If you deduct state income tax

Colorado adds back state income tax that you deduct on Schedule A, down to the federal standard deduction.

About this estimate

The calculator applies the $75,000 Social Security line to every filing status except joint. This is not certain.

If you enter your Social Security and leave your age blank, the calculator assumes you are 65 or older, when Colorado exempts all of it, and shows a warning with what the bill would be at 55 to 64. If you give your age, it uses it. Under 65 it applies the 55 to 64 rule.

If you file married filing separately or head of household, the calculator uses the single limit of $1,000. This is not confirmed.

The calculator follows the statute, so at federal AGI of exactly $300,000 it applies the deduction limit.

The calculator does not include the add-back of state income tax deducted on Schedule A.

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. HB24-1142 as signed, amending C.R.S. 39-22-104(4)(f): the Social Security subtraction at 55 to 64 and its AGI lines (checked 2026-09-26)
2. 2025 DR 0104 booklet, DR 0104AD lines 3 and 5, the Social Security subtraction by age and AGI (checked 2026-09-26)
3. Colorado Individual Income Tax Guide (January 2026): federal taxable income as the start, and the deduction limit at $300,000 of federal AGI (checked 2026-09-25)
4. C.R.S. 39-22-104(1.7)(c), flat 4.4 percent on federal taxable income, and 39-22-104(2) requiring the subsection (3) and (4) modifications, none of which adds back the federal deduction for seniors. The only one at 65 or older, (4)(f), is for pensions, annuities and Social Security (checked 2026-10-03)
5. C.R.S. 39-22-104(3)(p.7)(I), from tax year 2026, addback of deductions above $1,000 single and $2,000 joint at federal AGI equal to or exceeding $300,000. (3)(p.5)(I) set $12,000 and $16,000 for tax years 2023 through 2025 (checked 2026-10-03)
6. HB25-1274 section 18, adding C.R.S. 39-22-104(3)(p.7): from tax year 2026, addback of deductions above $1,000 single and $2,000 joint at federal AGI equal to or exceeding $300,000 (checked 2026-10-01)
7. C.R.S. 39-22-103(5.3), Internal Revenue Code as it may become effective at any time or from time to time for the taxable year (checked 2026-10-03)
8. C.R.S. 39-22-109, income of a nonresident individual and the AGI ratio apportionment (checked 2026-10-03)
9. CO DOR Individual Income Tax Guide, revised January 2026, rate table, deduction limit table and gambling withholding (checked 2026-09-12)
10. C.R.S. 39-22-604(17), withholding from winnings that are subject to withholding for federal income tax purposes (checked 2026-10-11)
11. 2025 DR 0104 Book, line 4 standard or itemized federal deduction addback and line 13 Colorado tax, rev. 10/29/25 (checked 2026-09-12)
12. CO DOR Withholding Tax Topics: gambling winnings, revised March 2026, 4 percent withholding (checked 2026-09-12)
13. CO DOR Income Tax Topics: part-year residents and nonresidents, February 2024, gambling conducted in Colorado is Colorado source income (checked 2026-09-12)
14. Form DR 0104EP (06/10/25), 2026 estimated tax worksheet line 2, "Estimated 2026 Colorado income tax", at "4.4% of line 1" (checked 2026-10-03)
15. Legislative Council Staff, Economic & Revenue Forecast, September 2026: the State Controller certified on September 8, 2026 that FY 2025-26 revenue fell short of the Referendum C cap by $175.9 million, so no TABOR refund for tax year 2026 (checked 2026-10-03)
16. CO DOR January 2026 tax policy updates, list of 2026 legislative changes (checked 2026-09-12)

The federal rule, for the parts of this page that rest on it

17. Public Law 119-21 section 70114(a), which rewrote 26 U.S.C. 165(d) on wagering losses from tax year 2026 and sets out its text (checked 2026-10-18)

We could not confirm these from an official source: whether any city or county tax applies.