Colorado Estate and Inheritance Tax: What You Owe in 2026

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One of the most common worries after a death is taxes: will the state take a cut of the inheritance? For Colorado residents the answer is reassuring. Colorado has no state estate tax and no state inheritance tax. Whatever you leave to your heirs passes to them without any state-level death tax at all. The only death tax that can apply is the federal estate tax, and it reaches only a tiny fraction of estates.

This guide explains the difference between the two kinds of death tax, confirms Colorado's position, and lays out the current federal rules so you know exactly where you stand.

The bottom line for Colorado

  • Colorado estate tax: none
  • Colorado inheritance tax: none
  • Federal estate tax: applies only above a very high exemption
  • 2026 federal exemption: $15 million per person
  • Top federal rate: 40%

Estate tax versus inheritance tax

People use these terms interchangeably, but they are different. An estate tax is charged to the estate itself before assets are distributed, based on the total value of what the person owned. An inheritance tax is charged to the person who receives the inheritance, often at a rate that depends on how closely related they were to the deceased. A handful of states impose one or the other. Colorado imposes neither.

Colorado has no death tax

Colorado does not levy an estate tax or an inheritance tax. Colorado once collected a so-called pick-up estate tax that was tied directly to a credit on the federal estate tax return. When federal law phased out that credit, Colorado's estate tax dropped to zero and has stayed there, because the state tax was defined entirely by reference to the now-defunct federal credit.1 The Colorado Department of Revenue confirms that there is no separate state estate or inheritance tax to file.2

That means a Colorado resident inheriting a house, a bank account, or a retirement account owes no state tax simply for receiving it. Keep in mind that income generated after death, such as interest, dividends, or gains, can still be taxable income, and inherited retirement accounts have their own federal income-tax rules. Those are income taxes, not death taxes, and they are a separate topic.

The federal estate tax

The only death tax a Colorado estate might face is the federal estate tax, and it applies to very large estates only. Every person has a federal estate and gift tax exemption. You can pass up to that amount, during life and at death combined, with no federal estate tax. Only the value above the exemption is taxed, at rates that climb to a top marginal rate of 40%.3

2026 federal figures. Under the federal tax law enacted in July 2025, the estate and gift tax exemption was made permanent and set at $15 million per person for 2026, indexed to rise with inflation in later years. A married couple can effectively shield up to $30 million using portability of the unused exemption. The top federal estate tax rate remains 40%.4

In practical terms, the overwhelming majority of Colorado estates fall far below $15 million and owe no federal estate tax at all. If your estate approaches that range, that is exactly the situation where professional planning pays off, and you should consult an estate attorney and a tax advisor.

What actually matters for most Coloradans

Because neither Colorado nor the federal government will tax a typical estate, the real work of estate planning in Colorado is not tax avoidance. It is control: making sure the right people inherit the right things, with as little friction as possible. That comes down to two things.

  • Having a valid will. Without one, Colorado's intestacy rules decide who inherits, which may not match your wishes. See our guide on dying without a will in Colorado to understand how the default rules would divide your estate.
  • Keeping assets moving smoothly. Beneficiary designations, a beneficiary deed, and clear instructions reduce delay and cost. Our guide on how to avoid probate in Colorado covers the tools.

Put your plan in place

Since taxes are rarely the obstacle for a Colorado estate, the most valuable step is simply documenting your wishes. A clear, valid Colorado will names who inherits, who serves as your personal representative, and who cares for any minor children. You can create one in plain language with our online will builder, or read our step-by-step guide on how to write a will in Colorado.

This article is general information about Colorado and federal law, not tax or legal advice. Tax figures change; confirm current numbers with the IRS or a qualified advisor before acting.

Frequently Asked Questions

Does Colorado have an inheritance tax?

No. Colorado imposes no inheritance tax, so heirs owe the state nothing on what they receive.

Does Colorado have an estate tax?

No. Colorado has no state estate tax. Its old pick-up tax disappeared when the federal credit it depended on was repealed.

How much can you inherit before paying federal estate tax in 2026?

The federal estate and gift tax exemption is $15 million per person for 2026. Only value above the exemption is taxed, at a top rate of 40%.

Do I owe tax on money I inherit in Colorado?

Not on the inheritance itself. There is no Colorado death tax. Income earned by inherited assets after death, and distributions from inherited retirement accounts, can still be subject to income tax.

Sources

  1. 1Colorado Revised Statutes, Title 39 (Taxation), estate tax provisions (leg.colorado.gov)
  2. 2Colorado Department of Revenue, Taxation Division (tax.colorado.gov)
  3. 3IRS: Estate Tax overview and rates (irs.gov)
  4. 42026 federal estate tax exemption ($15M) made permanent (kiplinger.com)
Max Kuch

About the author

Max Kuch

Max Kuch writes about estate planning, wills and inheritance for Online Will Colorado. He gathers the rules from the Colorado statutes and the leading public data, then explains them in plain, accessible language so anyone can put their wishes in writing.

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Frequently asked questions

Yes, when you finish it correctly. Colorado recognizes the holographic will under C.R.S. Sec. 15-11-502(2). Such a will is valid if the signature and the material portions are in the testator's own handwriting, and no witnesses are required. Our service builds your draft to reflect Colorado succession law, but the document only becomes a valid holographic will once you copy the material portions in your own hand and sign it yourself. A printout that you merely sign does not qualify.

Because that is exactly what Colorado law demands for this route. Under C.R.S. Sec. 15-11-502(2), a holographic will skips the usual witness requirement only if the signature and the material portions are in your own handwriting. A typed or printed page, even with your signature, would not meet that test and could be rejected in probate. We give you a clean, finished draft so the handwriting step is simple: you copy the wording onto paper in your own hand and sign it.

Your children, generally yes. Colorado has no forced heirship, so you are free to decide who inherits and you may leave an adult child out (be clear and specific to reduce disputes). Your spouse is different. Under the elective share rules in C.R.S. Sec. 15-11-201 and following, a surviving spouse who is disinherited can claim a statutory share of the augmented estate, and the percentage grows with the length of the marriage. You cannot fully cut out a spouse against their will, so plan realistically around that right.

Somewhere safe, dry, and findable by the person who will handle your estate. Many people use a home fireproof box or a bank safe deposit box and tell their personal representative where it is. Colorado also lets you deposit your will with the clerk of the district court for safekeeping during your lifetime under C.R.S. Sec. 15-11-515. There is no separate central will registry in the state, so what matters most is that the original can actually be located after your death.

We do not recommend it. A single joint document shared by two people creates problems for a holographic will, because each testator's material portions and signature must be in that person's own handwriting, and a joint will can tie the survivor's hands later. The cleaner approach is two separate mirror wills: each spouse handwrites and signs their own document, with matching terms. Our service walks each of you through your own will so both are individually valid.

Yes, and it is easy to do. In Colorado you can revoke or replace a will at any time while you have capacity. The simplest, safest method is to write a brand new holographic will that is fully in your own handwriting and signed by you, stating that it revokes all prior wills. Avoid crossing out lines or writing notes in the margins of an existing will, since messy edits invite challenges. When life changes (marriage, divorce, a new child, a move), make a fresh will.

No, and we are upfront about that. Our service helps you produce a solid, Colorado-specific draft to copy out by hand, which suits many straightforward estates. It is not legal advice and it does not replace an attorney. If your situation is complex (blended families, business interests, sizable or out-of-state assets, trusts, or possible disputes over the spousal elective share), talk to a Colorado estate planning lawyer before you rely on a handwritten will.

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