Live in Rhode Island, Work in Colorado: Which State Taxes Your Paycheck?
Answer
You file twice: Colorado first, then Rhode Island. There is no reciprocity agreement between these two states, so Colorado taxes the income where it was earned and Rhode Island taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Two states can lawfully tax the same wages: Colorado because the work happened there, Rhode Island because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Rhode Island return, through the credit for taxes paid to another state.
A Rhode Island resident taxed by another state on the same income claims the credit for taxes paid to other states on Form RI-1040NR Schedule II. The credit is capped at the Rhode Island 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 Rhode Island.
- 2Resident return · Rhode IslandForm RI-1040NR Schedule II
File a Rhode Island resident return reporting all income, then claim the credit for tax paid to Colorado. The credit is capped at what Rhode Island 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
| Rhode Island | Colorado | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form RI-1040NR | Form DR 0104 with Schedule DR 0104PN |
| Credit for other-state tax | Form RI-1040NR Schedule II | Form DR 0104CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | Rhode Island Division 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 Rhode Island 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: Rhode Island → ColoradoHome state only
- 1099 contractor: Rhode Island → ColoradoHome state, plus the client state if you work there
- Moved mid-year: Rhode Island → ColoradoTwo part-year returns
Other Rhode Island pairs
Questions people actually ask
I live in Rhode Island and work in Colorado. Which state takes the tax out of my paycheck?
You file twice: Colorado first, then Rhode Island. There is no reciprocity agreement between these two states, so Colorado taxes the income where it was earned and Rhode Island taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Colorado. The wages are sourced to Colorado, so Colorado withholding is correct and there is no Rhode Island 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. Rhode Island gives residents a credit for tax paid to Colorado on the same income, claimed on Form RI-1040NR Schedule II. The credit is capped at the Rhode Island tax on that income, so if Colorado taxes it more heavily the excess is not refunded by either state.
How current is this?
The Rhode Island and Colorado rules on this page were last checked against Rhode Island Division 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.
- Rhode Island Division of Taxation — individual income taxaccessed 2026-08-07
- Colorado Department of Revenue — Taxation Division — individual income taxaccessed 2026-08-07