Statutes, codes, and regulations
Colorado Administrative Code
Department 200 - Department of RevenueDivision 201 - Taxation Division
Rule 1 CCR 201-2 - INCOME TAX
Rule 39-22-605 - Estimated Individual Income Tax

Colo. Code Regs. 39-22-605

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Current through Register Vol. 47, No. 23, December 10, 2024
Rule 39-22-605 - Estimated Individual Income Tax
(1)Net Colorado Tax Liability. The net Colorado tax liability for purposes of the estimated tax computation is defined as the total amount of Colorado tax, alternative minimum tax, and recapture of prior year credits minus all income tax credits other than the state sales tax refund, withholding credits, and estimated tax credits.
(2)Required Estimated Payments. The annual amount required to be paid is the lesser of:
a) 70% of actual net Colorado tax liability.
b) 100% of preceding year's net Colorado tax liability. This subparagraph (2)(b) applies only if the preceding year was a 12-month tax year, the individual filed a Colorado return, and the individual's federal adjusted gross income for the preceding year was $150,000 or less, or $75,000 or less if the individual federal filing status was married separate.
c) 110% of preceding year's net Colorado tax liability. This subparagraph (2)(c) applies only if the preceding year was a 12-month tax year and the individual filed a Colorado return.
(3)Submitting Payments.
a) Estimated tax payments are due on the 15th day of the 4th, 6th, 9th month and 1st month of the following tax year. Payments will be first credited against the earliest quarterly installment due for the tax year regardless of when the payment is received.
b) Withholding credits and state sales tax refund are treated as if 25% of such credits and refund was paid in each quarter unless the taxpayer establishes the dates on which the amounts were actually withheld. Wage withholding and other withholding credits can be treated separately when determining whether to allocate 25% to each quarter or whether to allocate the credit to the quarter in which the amount was actually paid.
(4)Annualized Income Installment Method.
a) Taxpayers who do not receive income evenly during the year may elect to use the annualized income installment method to compute their estimated tax payments but only if they elected annualized installments for the payment of their federal income tax.
b) The required installment payment on each due date will be:
(i) the Colorado tax liability computed by annualizing the income received during the months of the tax year ending on the last day of the month before the due date for the installment payment, multiplied by
(ii) the applicable percentage listed below, minus
(iii) the total of any earlier installment payments made for the tax year.

Installment Due date

Income annualized from

Income annualized through

Applicable percentage

4/15

1/1

3/31

17.5%

6/15

1/1

5/31

35%

9/15

1/1

8/31

52.5%

1/15

1/1

12/31

70%

(c) A schedule and explanation of the allocation methodology must be made available to the Colorado Department of Revenue upon request in order to use this annualized method.
(5)Farmers and Fisherman.
(a) Farmer or fisherman means an individual whose gross income from farming or fishing is at least 2/3 of their total gross income for the tax year or the preceding tax year.
(b) The required annual amount to be paid by a farmer or fisherman is the lesser of:
(i) 50% of actual net Colorado tax liability, or
(ii) 100% of preceding year's net Colorado tax liability. This subparagraph (5)(b) applies only if the preceding year was a 12-month tax year and the individual filed a Colorado return)
(c) Estimated tax payments from a farmer or fisherman are due in a single payment by January 15 of following tax year.
(6)Estimated Tax Penalty.
(a) The estimated tax penalty will be assessed if the required estimated tax payments are not paid in a timely manner. The penalty will be the appropriate Colorado income tax interest rate multiplied by the amount of the underpayment for each quarter multiplied by the underpayment period.
(b) The estimated tax penalty will not be assessed if any of the following conditions are met:
(i) If the net Colorado tax liability minus any prepayments and credits, other than the estimated tax payments and credits, is less than $1,000.
(ii) If the taxpayer was a full-year resident for the preceding 12-month tax year and the net Colorado tax liability in that year was- 0-.
(iii) If the taxpayer is a farmer or fisherman and files a return with full payment of any tax due by March 1 of the following tax year.
(c) If the tax return is filed and any tax due is paid by January 31 of the following tax year, no penalty will be computed based on any underpayment of the fourth quarter installment payment.
(7)Joint Returns.
(a) Taxpayers who file a joint federal declaration of estimated tax must file a joint Colorado payment. Payment must be submitted under the same primary social security number used when the income tax return is filed.
(b) If a joint estimated tax payment is made but separate returns are filed, the estimated tax payments may be divided between the two taxpayers in any manner they desire. In the case of a disagreement between the spouses on how to claim the payments where each spouse claims 100% of the payments or together they claim over 100% of the payments, the payments will be divided in the same proportion as the net Colorado tax liability. If neither spouse has a tax liability, the payments will be split 50% for each spouse. If one spouse claims less than the allocation formula provides, then that spouse will only be credited with the payments that were claimed and the other spouse will receive the balance of the payments.

39-22-605

Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/2014
37 CR 18, September 25, 2014, effective 10/15/2014
37 CR 19, October 10,2014, effective 10/30/2014
37 CR 22, November 25, 2014, effective 12/16/2014
38 CR 04, February 25, 2015, effective 3/17/2015
38 CR 07, April 10, 2015, effective 4/30/2015
38 CR 11, June 10, 2015, effective 6/30/2015
38 CR 22, November 25, 2015, effective 12/15/2015
38 CR 24, December 25, 2015, effective 1/14/2016
38 CR 24, December 25, 2015, effective 1/19/2016
39 CR 01, January 10, 2016, effective 1/30/2016
39 CR 16, August 25, 2016, effective 9/14/2016
40 CR 08, April 25, 2017, effective 5/15/2017
40 CR 12, June 25, 2017, effective 7/15/2017
40 CR 16, August 25, 2017, effective 9/14/2017
40 CR 23, December 10, 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 02, January 25, 2019, effective 12/18/2018
42 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/2019
42 CR 06, March 25, 2019, effective 4/14/2019
43 CR 04, February 25, 2020, effective 3/16/2020
43 CR 13, July 10, 2020, effective 6/2/2020
43 CR 17, September 10, 2020, effective 9/30/2020
44 CR 03, February 10, 2021, effective 3/2/2021
44 CR 07, April 10, 2021, effective 4/30/2021
44 CR 08, April 25, 2021, effective 5/15/2021
45 CR 01, January 10, 2022, effective 1/30/2022
45 CR 04, February 25, 2022, effective 3/17/2022
45 CR 05, March 10, 2022, effective 3/30/2022
46 CR 11, June 10, 2023, effective 5/2/2023
46 CR 09, May 10, 2023, effective 5/30/2023