Live in Ohio, Work in Colorado: Which State Taxes Your Paycheck?
Answer
Colorado withholds and Ohio credits. Without an agreement between them, both states are entitled to tax income earned in Colorado by a Ohio resident. The mechanism that stops you paying twice is the credit on the Ohio resident return, which is why the Colorado return has to be completed first.
Last verified
Without an agreement between Ohio and Colorado, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Colorado figure is an input to the Ohio return, so completing Ohio first means doing it twice.
A Ohio resident taxed by another state on the same income claims the credit for taxes paid to other states on Ohio Schedule of Credits (resident credit). The credit is capped at the Ohio tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
Colorado also has a layer below the state one, and it is the layer that survives every agreement: A few Colorado cities levy an occupational privilege tax — a flat monthly head charge on anyone working in the city, not a percentage of income. It is not an income tax and no credit offsets it.
What you file
- 1Nonresident return · ColoradoForm DR 0104 with Schedule DR 0104PN
File the Colorado nonresident return FIRST — you need the Colorado tax figure before you can complete Ohio.
- 2Resident return · OhioOhio Schedule of Credits (resident credit)
File a Ohio resident return reporting all income, then claim the credit for tax paid to Colorado. The credit is capped at what Ohio would have charged on that same income, so if Colorado taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Ohio | Colorado | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | 5 (Form IT 4NR) | None |
| Convenience rule | No | No |
| Nonresident return | Form IT 1040 with Schedule IT NRC | Form DR 0104 with Schedule DR 0104PN |
| Credit for other-state tax | Ohio Schedule of Credits (resident credit) | Form DR 0104CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Ohio Department of Taxation | Colorado Department of Revenue — Taxation Division |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Colorado and working in Ohio gives:Both states — credit offsets the double tax.
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.
- Remote worker: Ohio → ColoradoHome state only
- 1099 contractor: Ohio → ColoradoHome state, plus the client state if you work there
- Moved mid-year: Ohio → ColoradoTwo part-year returns
Other Ohio pairs
Questions people actually ask
I live in Ohio and work in Colorado. Which state takes the tax out of my paycheck?
Colorado withholds and Ohio credits. Without an agreement between them, both states are entitled to tax income earned in Colorado by a Ohio resident. The mechanism that stops you paying twice is the credit on the Ohio resident return, which is why the Colorado return has to be completed first.
Which state should my employer be withholding for?
Colorado. The wages are sourced to Colorado, so Colorado withholding is correct and there is no Ohio withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Ohio gives residents a credit for tax paid to Colorado on the same income, claimed on Ohio Schedule of Credits (resident credit). The credit is capped at the Ohio tax on that income, so if Colorado taxes it more heavily the excess is not refunded by either state.
How current is this?
The Ohio and Colorado rules on this page were last checked against Ohio Department of Taxation and Colorado Department of Revenue — Taxation Division 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.
- Ohio Department of Taxation — individual income taxaccessed 2026-08-07
- Ohio — Form IT 4NRaccessed 2026-08-07
- Colorado Department of Revenue — Taxation Division — individual income taxaccessed 2026-08-07