Estimated tax is the method used to pay tax on income
that is not subject to withholding. Wages typically have
withholding, but earnings from self-employment, interest,
dividends, rents, etc. would be subject to estimated tax. You
might also pay estimated tax if your withholdings are not
enough to be excluded from the General Rule below. If you
le federal Form 1040-ES with the federal Internal Revenue
Service (IRS), typically you would pay estimated tax to the
Colorado Department of Revenue. See the individual income
tax guidance publications available at Tax.Colorado.gov for
more information.
General Rule
In most cases, you must pay estimated tax if you expect to
owe more than $1,000 in net tax for 2022, after subtracting
any withholding or credits you might have.
Required Payments
The required annual amount to be paid is the smaller of:
• 70% of the actual net Colorado tax liability (or, if at
least 2/3 of your income is from farming or shing,
50% of the actual net Colorado tax liability), or
• 100% of the preceding year’s net Colorado tax
liability. This rule only applies if the preceding year
was a 12-month tax year, the individual led a
Colorado return, and the federal adjusted gross
income on that return was $150,000 or less (or, if
married ling separately, $75,000 or less), or
• 110% of the preceding year’s net Colorado tax
liability. This amount applies only if the preceding
year was a 12-month year, and the individual led a
Colorado return.
Annualized Installment Method
If you use an annualized method to le estimated payments
for your federal income tax, you may le using this method
for Colorado estimated payments. Specic instructions for the
annualized installment method are available in publication
Individual Income Tax Guide.
Carryforward of Estimated Overpayment
Any overpayment designated for carryforward on your Colorado
income tax return from the previous year will be applied to
the rst estimated tax payment due for this tax period.
Calculating the Payment
Estimated tax payments can be made on a quarterly basis.
Use the worksheet provided on the following page to
calculate the amount of estimated tax owed. Reference the
previous year Colorado income tax return and instructions
for help determining taxable income. Those who le joint
returns must make the payment under the taxpayer name
and Social Security or ID number that will be listed rst on
the income tax return. Remit payments on or before the
due dates listed in the table following calculation worksheet
on the next page.
Penalties
Failure to timely remit estimated tax as necessary will result
in an Estimated Tax Penalty. By law, exceptions will be given
to farmers or shermen who le and remit full payment
by March 1. Otherwise, penalty will be calculated for each
missed, late, or underpaid payment. For calculation specics,
or to remit this penalty before being billed, see form DR 0204,
Underpayment of Individual Estimated Tax.
Refunds
Estimated tax payments can only be claimed as prepayment
credit on the 2022 Colorado income tax return. Therefore,
estimated payments cannot be refunded in any manner until
such time that the Colorado income tax return is led.
Go Green with Revenue Online
Colorado.gov/RevenueOnline allows taxpayers to
file taxes, remit payments and monitor their tax
accounts. The DR 0104EP is not required if electronic
payment is remitted through this site. Please be
advised that a nominal processing fee may apply
to electronic payments.
Pay by Electronic Funds Transfer (EFT)
EFT payments can be made safely, for free, and
can be scheduled up to 12 months ahead of time to
avoid forgetting to make a quarterly payment. This
requires pre-registration before payments can be
made. Visit Tax.Colorado.gov/electronic-funds-transfer
for registration information.
Additional information, guidance publications and
forms are available at Tax.Colorado.gov or you can
call 303-238-SERV (7378) for assistance.
Individual Estimated Income Tax
Instructions
DR 0104EP ( 07/01/21)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0008
Tax.Colorado.gov
*DO=NOT=SEND*
