Live in Colorado, Work Remotely for a South Carolina Employer: Who Taxes You?
Answer
Colorado gets all of it. Because South Carolina does not tax wage income, no South Carolina withholding exists and no South Carolina return is required — but Colorado taxes residents on worldwide income, so every dollar earned in South Carolina still belongs on your Colorado resident return.
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 South Carolina 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 | South Carolina | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form DR 0104 with Schedule DR 0104PN | Form SC1040 with Schedule NR |
| Credit for other-state tax | Form DR 0104CR | Form SC1040TC |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Colorado Department of Revenue — Taxation Division | South Carolina Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in South Carolina 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 → South CarolinaBoth states — credit offsets the double tax
- 1099 contractor: Colorado → South CarolinaHome state, plus the client state if you work there
- Moved mid-year: Colorado → South CarolinaTwo part-year returns
Other Colorado pairs
Questions people actually ask
I live in Colorado and work remotely for a South Carolina employer. Which state do I pay?
Colorado gets all of it. Because South Carolina does not tax wage income, no South Carolina withholding exists and no South Carolina return is required — but Colorado taxes residents on worldwide income, so every dollar earned in South Carolina still belongs on your Colorado resident return.
Which state should my employer be withholding for?
Colorado. Your employer should withhold Colorado tax rather than South Carolina tax on these wages. If a South Carolina line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my South Carolina employer's location alone create a South Carolina tax obligation?
No. South Carolina 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 South Carolina are a different matter — those are South Carolina-source income and can require a nonresident return.
How current is this?
The Colorado and South Carolina rules on this page were last checked against Colorado Department of Revenue — Taxation Division and South Carolina Department of Revenue 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
- South Carolina Department of Revenue — individual income taxaccessed 2026-08-07