Colorado Lawmakers Reject Federal Overtime Exemption Prioritizing Revenue Over Relief
By John Frank | AXIOS
President Trump's "big, beautiful bill" would make some overtime pay exempt from federal income taxes.
Yes, but: Colorado won't do the same.
State of play: State lawmakers tucked a little-noticed provision into a lengthy tax bill earlier this year to decouple from federal law when it comes to overtime pay, starting in 2027.
This means you'll have to pay Colorado's 4.4% income tax on overtime wages, state legislative analysts confirmed, even with a federal exemption.
Context: Colorado typically aligns with federal tax law, meaning if there are tax exemptions at the federal level, they would apply to state taxes. In this case, the state decided to break from federal law if the spending bill passes.
What they're saying: Rep. Lorena Garc...