Live in Colorado, Work Remotely for a Hawaii Employer: Who Taxes You?
Answer
Only Colorado taxes you. Hawaii levies no personal income tax on wages, so nothing is withheld there and you file no Hawaii return. Colorado taxes its residents on all income wherever earned, which means your Hawaii earnings go on a Colorado resident return in full.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Colorado reaches all of a resident's income, and Hawaii adds nothing on top.
What you file
- 1Resident return · Colorado
File a Colorado resident return reporting all of your income.
The two states, side by side
| Colorado | Hawaii | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form DR 0104 with Schedule DR 0104PN | Form N-15 |
| Credit for other-state tax | Form DR 0104CR | Schedule CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Colorado Department of Revenue — Taxation Division | Hawaii Department of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Hawaii and working in Colorado gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Colorado → HawaiiBoth states — credit offsets the double tax
- 1099 contractor: Colorado → HawaiiHome state, plus the client state if you work there
- Moved mid-year: Colorado → HawaiiTwo part-year returns
Other Colorado pairs
Questions people actually ask
I live in Colorado and work remotely for a Hawaii employer. Which state do I pay?
Only Colorado taxes you. Hawaii levies no personal income tax on wages, so nothing is withheld there and you file no Hawaii return. Colorado taxes its residents on all income wherever earned, which means your Hawaii earnings go on a Colorado resident return in full.
Which state should my employer be withholding for?
Colorado. Your employer should withhold Colorado tax rather than Hawaii tax on these wages. If a Hawaii line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Hawaii employer's location alone create a Hawaii tax obligation?
No. Hawaii sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Hawaii are a different matter — those are Hawaii-source income and can require a nonresident return.
How current is this?
The Colorado and Hawaii rules on this page were last checked against Colorado Department of Revenue — Taxation Division and Hawaii Department of Taxation on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Colorado Department of Revenue — Taxation Division — individual income taxaccessed 2026-08-07
- Hawaii Department of Taxation — individual income taxaccessed 2026-08-07