Colo. Code Regs. 39-21-119.5

Current through Register Vol. 47, No. 23, December 10, 2024

Rule 39-21-119.5 - Requirements for Electronic Filing and Electronic Payment

Basis and Purpose. The statutory bases for this rule are sections 39-21-102, 39-21-112(1), 39-21-119, 39-21-119.5, 39-21-120, and 39-22-608 C.R.S. The purpose of this rule is to clarify the requirements for electronic filing and electronic payment, the penalty for failure to comply therewith, and the hardship waiver available therefrom.

(1)General Rule. Except as otherwise provided in this rule, a return or payment sent to the Department electronically is deemed filed or made on the date and time of its electronic postmark.

(a) A return or payment is deemed timely filed or made if the date of its electronic postmark is on or before its due date; and

(b) A return or payment is deemed delinquent if the date of its electronic postmark is after its due date.

(2)Definitions. As used in this rule, unless the context otherwise requires:

(a) "Competent evidence" means testimony from a person other than the taxpayer or documentation, either of which is credible and sufficient to prove that the return or payment was sent to the Department electronically on a specified date at a specified time.

(b) "Electronic postmark" means a record of the date and time when:

(i) The electronic payment is requested to be made to the Department;

(ii) The transmitter received the return on its host computer system, if the Internal Revenue Service (IRS) and the Department accept the first transmission of the return through the IRS Federal/State E-file program; or

(iii) The Department received the return, if the Department accepts the return, either through:

(A) The Department's online portal (Colorado.gov/RevenueOnline);

(B) The Department's Sales and Use Tax System;

(C) A transmitter using secure file transfer protocol; or

(D) Another electronic means approved by the Department.

(c) "Payment" means any payment required to be made within the scope specified in section 39-21-102, C.R.S.

(d) "Taxpayer" means a person required to account to the Department for a tax or fee imposed within the scope specified in section 39-21-102, C.R.S.

(e) "Taxpayer ID number" for an electronic payment means one of the following numbers:

(i) Colorado Account Number (CAN),

(ii) Social Security Number (SSN),

(iii) Individual Taxpayer Identification Number (ITIN),

(iv) Federal Employer Identification Number (FEIN), or

(v) Electronic Funds Transfer (EFT) number obtained from the Department prior to making a payment.

(f) "Transmitter" means a person other than the taxpayer that is:

(i) authorized by the IRS to transmit electronic tax return information directly to the IRS, or

(ii) authorized by the Department to transmit electronic tax return information directly to the Department.

(3)Electronic Filing. The electronic filing of a return must be completed by electronic means in a form and format that has been approved by the Department. A return filed electronically is deemed filed on the date of its electronic postmark, except that:

(a)Time Zone Adjustment. If a return is deemed delinquent and the taxpayer's residence is in a different time zone from the transmitter or the Department, the taxpayer may request that the Department adjust the date and time of the electronic postmark to the time zone of the taxpayer's residence;

(b)IRS Receipt Date Adjustment. A return the Department accepts through the IRS Federal/State E-file program is deemed filed on the IRS receipt date if:

(i) The transmitter receives the return on or before the due date of the return but transmits the return to the IRS more than two days after the due date; or

(ii) The electronic postmark is after the due date of the return; and

(c)Rejected Return. A return rejected by the IRS or the Department is deemed to not have been filed until the taxpayer corrects the return and the Department accepts it, except that:

(i) If the Department accepts through the IRS Federal/State E-file program a return that the IRS previously rejected but the taxpayer corrected within the IRS perfection period for timely filing a corrected return after rejection, the return is deemed filed on the IRS rejection date.

(4)Electronic Payment. A payment of any tax or fee to the Department by electronic funds transfer (EFT) must be made via an electronic means approved by the Department, including automated clearing house (ACH) credit or debit, credit or debit card, and international wire transfer.

(a)Required Information. An EFT payment must designate a taxpayer ID number, the type of tax or fee, and the tax period to which the payment will apply.

(i) An ACH credit payment must include this information in a Tax Payment (TXP) or Third Party Payment (TPP) addenda record.

(ii) For the taxpayer ID number, a Digital Bill Pay ACH debit payment must use an EFT number obtained in advance from the Department.

(b)Date and Time of Payment. A payment with an electronic postmark at or before 11:59 P.M. Mountain Time is deemed made on that day, except that:

(i) A payment made via ACH credit with an electronic postmark on a business day before the originating financial institution's cut-off time is deemed made on that day;

(ii) A payment made via Digital Bill Pay ACH debit, or any such successor payment program, with an electronic postmark on a business day at or before 3:59 P.M. Mountain Time is deemed made on that day;

(iii) A payment made via ACH credit or Digital Bill Pay ACH debit, or any such successor payment program, with an electronic postmark that is not on a business day, or is after the time required pursuant to section 39-21-119.5(6)(c), C.R.S., and paragraphs (4)(b)(i) and (ii) of this rule, is deemed made on the following business day; and

(iv) A payment rejected or returned by a financial institution is deemed to not have been made.

(5)Due Dates. In order for a return or payment to be deemed timely filed or made on a Saturday, Sunday, or legal holiday under section 39-21-119(3), C.R.S., the Department shall extend its due date to the next business day.

(a) If the due date for a federal income tax return or payment is extended because of Emancipation Day in the District of Columbia, the due date for any corresponding Colorado income tax return or payment is also extended to coincide with the federal due date.

(b) If the due date for a return or payment falls upon Columbus Day, a federal holiday that the State of Colorado does not observe, the due date is extended to the next business day.

(6)Proof of Submission. The taxpayer bears the burden to demonstrate, by competent evidence, when a return or payment was sent to the Department, if the return or payment was:

(a) Sent to the Department electronically but not received by the Department; or

(b) Deemed delinquent.

(7)Penalty. A taxpayer who fails or refuses to file a return or make a payment electronically as required by section 39-21-119.5, C.R.S., or any Department rule, is subject to the penalty imposed by section 39-21-119.5(5), C.R.S., regardless of whether the taxpayer files the return or makes the payment by another means, and regardless of whether the Department processes such return or payment, except that such penalty does not apply to:

(a) A return or payment to which a hardship waiver applies pursuant to section 39-21-119.5(6), C.R.S., and paragraph (8) of this rule; or

(b) Annual withholding statements required to be filed electronically pursuant to section 39-22-604(6)(b), C.R.S., and 1 CCR 201-2, Rule 39-22-604(8)(b).

(8)Hardship Waiver. The Department may grant a request for a waiver from the requirements to file returns electronically or make electronic payments of any tax or fee enumerated in section 39-21-119.5, C.R.S., or any Department rule, except the requirement to file annual withholding statements electronically pursuant to section 39-22-604(6)(b), C.R.S., and 1 CCR 201-2, Rule 39-22-604(8)(b).

(a)Requesting a Waiver.

(i) A taxpayer may request an initial waiver for one year, and then request a renewal of the waiver for one subsequent year, by submitting to the Department form DR 0620, Request for Hardship Waiver from Electronic Filing and EFT Payment Requirements;

(ii) A taxpayer who is granted a waiver for two years is not eligible for another waiver, even if electronic filing of returns or electronic payment is subsequently required for an additional tax or fee pursuant to section 39-21-119.5, C.R.S., or any Department rule.

(b)Waiver Period. A waiver applies for one year from the date the waiver is granted. A renewal of a hardship waiver applies for one year from the date the renewal is granted or effective, whichever is later.

(c)Effect of a Waiver. A waiver applies to all returns or payments that the taxpayer files or makes during the waiver period. During the waiver period:

(i) The taxpayer must still file returns or make payments to the Department as otherwise required, but may do so by a means other than electronically; and

(ii) The taxpayer is not subject to the penalty set forth in paragraph (7) of this rule, but may be subject to other types of penalties and interest.

39-21-119.5

38 CR 03, February 10, 2015, effective 3/2/2015

40 CR 22, November 25, 2017, effective 1/1/2018

41 CR 14, July 25, 2018, effective 8/14/2018

41 CR 20, October 25, 2018, effective 11/14/2018

42 CR 05, March 10, 2019, effective 3/30/2019

44 CR 05, March 10, 2021, effective 3/30/2021

46 CR 03, February 10, 2022, effective 3/2/2023

46 CR 06, March 25, 2023, effective 4/14/2023