I sold my home in CO (military PCS) and capital gains tax doesn't apply. Do I still need to file a nonresident state return? Does the profit count as income?

[ShirlynW]

Yes. You must file a Colorado income tax return if you fall into one of these categories:

1. During the year you were a full-year, part-year or non-resident of Colorado with Colorado taxable income AND you were required to file a federal income tax return.
2. You had a Colorado income tax liability for the year.

Yes. The profit from the sale of a home is income. The excess is reported as capital gain.