Colorado has what's called "rolling conformity" with the Internal Revenue Code, which means the state automatically adopts and follows the Internal Revenue Code unless it specifically choose certain sections to not conform to. Income and expenses are calculated the same way for Colorado as they are for federal. Therefore, if you qualify for the federal exclusion of the gain on your primary residence you would not need to add it back to your Colorado return.
Cite: CO Revenue Statute Section 39-22-103(5.3)
