The Colorado DR 0106EP form is a worksheet used for estimating tax payments for nonresident individuals who earn income sourced from Colorado. This form helps taxpayers calculate their estimated tax obligations for the year, ensuring compliance with state tax regulations. Understanding this form is essential for nonresidents participating in a composite filing, as it outlines the necessary steps and requirements for accurate tax payment.
The Colorado DR 0106EP form serves as a vital tool for nonresident individuals who earn income sourced from Colorado. This form is specifically designed for those participating in a composite filing, allowing them to estimate their state tax obligations for the year 2014. By calculating their expected Colorado taxable income, individuals can determine the estimated tax due, which is calculated at a rate of 4.63%. The form also includes sections for applying any available credits, ensuring that taxpayers only pay what they owe. Additionally, it outlines important due dates for quarterly payments, which are crucial for avoiding penalties. Taxpayers can submit their payments electronically or via a detachable coupon included with the form, providing flexibility in how they manage their tax obligations. It’s important to note that failure to remit the estimated tax on time may result in penalties, emphasizing the need for careful planning and adherence to deadlines. This form not only helps nonresidents fulfill their tax responsibilities but also facilitates a smoother tax filing process when they complete their Colorado income tax return.
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DR 0106EP (10/19/22)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0008
Tax.Colorado.gov
Colorado Pass-Through Entity Estimated Income Tax
Instructions
Taxpayers are required to make estimated payments during the tax year if their Colorado income tax due will exceed certain thresholds. This form is used for partnerships and S corporations to make estimated payments.
General Rule
In most cases, a partnership or S corporation must pay estimated tax if it will file a composite return on behalf of nonresident partners, and the Colorado income tax liability for any individual partner or shareholder per the composite return will be more than $1,000 for 2023
A partnership or S corporation that elects to be subject to tax at the entity level under section 39-22-343, C.R.S. is subject to the same requirement to remit quarterly estimated tax payments as C corporations. In general, an electing entity will pay estimated tax if its Colorado income tax liability will exceed $5,000 for 2023.
Required Payments
In general, payments are required quarterly, and the amount due is 25% of the required annual payment. The required annual payment is generally 70% of the actual net Colorado tax liability for the current year, or 100% of the actual net Colorado tax liability for the preceding year (whichever is less). For more information on calculating estimated payment for nonresident partners and shareholders included in a composite return, please see the Individual Income Tax Guide.
Please see the Corporate Income Tax guide if the partnership or S corporation intends to make an election under the SALT Parity Act.
Calculating the Payment
Estimated tax payments must be made on a quarterly basis.
Payments and forms should be submitted using the same account number as will be used on the Colorado Partnership and S Corporation and Composite Nonresident Income Tax Return (DR 0106). If, for any reason, the account numbers are inconsistent, the Department must be notified in writing prior to filing the DR 0106. Mail this notification to:
Colorado Department of Revenue
Denver, CO 80261-0008
being billed, see form DR 0204, Underpayment of Individual Estimated Tax (composite filers) or form DR 0205, Underpayment of Corporate Estimated Tax (entities making an election under the SALT Parity Act).
Refunds
Estimated tax payments can only be claimed as prepayment credit on the 2023 Colorado income tax return. Therefore, estimated payments cannot be refunded until the 2023 Colorado income tax return is filed.
SALT Parity Act Election
A partnership or S corporation may, on an annual basis, elect to be subject to tax at the entity level under the SALT Parity Act (section 39-22-343, C.R.S.). This is a binding election on the pass-through entity and all owners, and the election is irrevocable for the tax year. The election can be made during the tax year on this form DR 0106EP, or on the Colorado income tax return (DR 0106) when it is filed after the close of the tax year. Mark this box only if the partnership or S corporation is making the election under the SALT Parity Act for this tax year. This election cannot be revoked for this tax year once it is made. A partnership or S corporation may make required estimated payments before making an election under the SALT Parity Act.
Go Green with Revenue Online
Colorado.gov/RevenueOnline allows taxpayers to file taxes, remit payments and monitor their tax accounts. DR 0106EP is not required to be sent 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.
Penalties
Failure to timely remit estimated tax will result in an estimated tax penalty. An estimated tax penalty will also be calculated for each missed or underpaid payment.
For calculation specifics, or to remit this penalty before
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2023 Colorado Pass-Through Entity Estimated Tax
Payment Form
Only return this payment form with a check or money order.
DO NOT CUT – Return Full Page
DR 0106EP
Mark this box to indicate that this pass-through entity is electing to be subject to tax at the entity level under the SALT Parity Act (section 39-22-343, C.R.S.) for this tax year. This is a binding election on the pass-through entity and all owners, and the election cannot be revoked during the tax year.
For the calendar year 2023 or the fiscal year:
Beginning (MM/DD/23)
Ending (MM/DD/YY)
Return the DR 0106EP with check or money order payable to the “Colorado Department of Revenue”. Mail payments to Colorado Department of Revenue, Denver, Colorado 80261-0008. These addresses and zip codes are exclusive to the Colorado Department of Revenue, so a street address is not required. Write your Colorado Account Number or FEIN and “2023 DR 0106EP” on your check or money order. Do not send cash. Enclose, but do not staple or attach, your payment with this form. File only if you are making a payment of estimated tax.
FEIN
Colorado Account Number
Organization Name
Address
City
State
ZIP
Due Date (MM/DD/YY)
Amount of Payment
The State may convert your check to a one-time electronic banking transaction. Your bank account may be debited as early as the same day received by the State. If converted, your check will not be returned. If your check is rejected due to insufficient or uncollected funds, the Department of Revenue may collect the payment amount directly from your bank account electronically.
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DO NOT CUT – Return Full Page. IF NO PAYMENT IS DUE, DO NOT FILE THIS FORM.
When dealing with the Colorado DR 0106EP form, several other forms and documents can be essential for ensuring compliance with state tax regulations. Each of these documents serves a specific purpose and can help streamline the tax filing process for nonresident individuals. Below is a list of related forms that you might encounter.
Understanding these forms and how they interact with the Colorado DR 0106EP can significantly ease the tax filing process for nonresidents. Properly completing and submitting these documents ensures compliance and helps avoid potential penalties. Always consider consulting with a tax professional for personalized guidance based on your specific situation.
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Filling out the Colorado DR 0106Ep form is a crucial step for nonresident individuals who need to make estimated tax payments. This process requires careful attention to detail to ensure that all information is accurate and complete. After gathering the necessary information, follow the steps below to fill out the form correctly.
Once you have completed these steps, ensure that everything is accurate before mailing the form and payment. This will help avoid any potential issues with your estimated tax payments.
The Colorado DR 0106EP form is similar to the IRS Form 1040-ES, which is used for estimated tax payments by individuals. Both forms allow taxpayers to estimate their tax liability and make payments on a quarterly basis. The 1040-ES is specifically designed for U.S. citizens and residents, while the DR 0106EP focuses on nonresidents earning income from Colorado sources. Each form requires taxpayers to calculate their estimated income and tax due, ensuring compliance with tax obligations throughout the year.
In order to ensure a seamless vehicle transfer when dealing with ownership changes, it is important to complete the necessary documentation, such as the Texas Motor Vehicle Bill of Sale. This legal form captures critical transaction details and can be easily accessed online at topformsonline.com/texas-motor-vehicle-bill-of-sale/, ensuring both sellers and buyers understand their rights and responsibilities during the sale process.
Another document that shares similarities with the DR 0106EP is the IRS Form 1065, which is used by partnerships to report income, deductions, and credits. While the DR 0106EP is for nonresident individuals making estimated tax payments, Form 1065 provides a comprehensive overview of a partnership's financial activities. Both forms require accurate reporting of income and tax liabilities, but they serve different purposes within the tax system.
The Colorado DR 0106EP also resembles the IRS Form 1120-W, which is the estimated tax for corporations. Both forms require the taxpayer to estimate their tax liability and make payments accordingly. The key difference lies in the type of taxpayer; the DR 0106EP is for nonresident individuals, while Form 1120-W is specifically for corporations. Each form emphasizes the importance of timely payments to avoid penalties.
Form 1040-SR, which is designed for seniors, is another document similar to the DR 0106EP. Both forms allow taxpayers to make estimated tax payments, although the 1040-SR is tailored for individuals aged 65 and older. Each form requires taxpayers to calculate their estimated income and tax due, ensuring that they meet their tax obligations. The 1040-SR includes features that simplify the filing process for seniors, while the DR 0106EP caters specifically to nonresidents.
The IRS Form 4868, which is an application for an automatic extension of time to file a U.S. individual income tax return, shares some similarities with the DR 0106EP. Both forms deal with tax obligations, but while Form 4868 allows for an extension of the filing deadline, the DR 0106EP focuses on making estimated tax payments. Each form requires careful attention to deadlines to avoid penalties, highlighting the importance of timely compliance.
Form 1120, the U.S. Corporation Income Tax Return, is another document that parallels the DR 0106EP. Both forms involve the reporting of tax liabilities, though the 1120 is used by corporations, while the DR 0106EP is for nonresident individuals. Each form requires detailed calculations of income and tax owed, and both emphasize the necessity of accurate reporting to avoid penalties and ensure compliance with tax laws.
The IRS Form 941, which is the Employer's Quarterly Federal Tax Return, is similar in that it requires periodic tax payments. However, Form 941 is specifically for employers to report payroll taxes, while the DR 0106EP is for nonresident individuals making estimated tax payments. Both forms necessitate timely submissions to avoid penalties and ensure that tax obligations are met throughout the year.
Another relevant document is the IRS Form 990, which is used by tax-exempt organizations to report financial information. While Form 990 focuses on nonprofit entities, it shares the need for accurate financial reporting similar to the DR 0106EP. Both forms require detailed calculations and adherence to specific deadlines, although they apply to different types of taxpayers and situations.
Lastly, the Colorado DR 0106EP has similarities with the IRS Form 1099, which is used to report various types of income other than wages. While the 1099 form is primarily informational, both documents require accurate reporting of income and tax implications. The DR 0106EP, however, focuses on estimated tax payments for nonresident individuals, whereas the 1099 serves to inform the IRS about income received by taxpayers from various sources.
The Colorado DR 0106Ep form is a worksheet used for making estimated tax payments for nonresident individuals who are included in a composite filing. This form is specifically for the 2014 tax year and helps taxpayers calculate their estimated Colorado taxable income and the corresponding tax amount owed.
This form is required for nonresident individuals who expect to owe more than $1,000 in Colorado income tax for the year. If you are part of a composite return, each individual included must calculate their estimated tax separately.
To calculate your estimated tax, follow these steps:
Use the provided worksheet on the form to assist with these calculations.
Payments for estimated tax are due on the following dates:
Ensure that payments are made by these deadlines to avoid penalties.
If you fail to make a timely payment, you may incur an Estimated Tax Penalty. This penalty applies to each missed or late payment. However, exceptions exist for farmers or fishermen who file and remit full payment by March 1.
Estimated tax payments cannot be refunded directly. They can only be claimed as prepayment credits on your Colorado income tax return once it is filed. Refunds will be processed in accordance with your overall tax liability for the year.
Yes, electronic payments can be made through the Colorado Department of Revenue's website. This method is encouraged as it helps avoid issues and delays. You can also schedule payments in advance through Electronic Funds Transfer (EFT) for added convenience.
For more information, you can visit the Colorado Department of Revenue's website at www.TaxColorado.com. You may also contact their customer service at 303-238-SERV (7378) for assistance with any questions or concerns related to the form.
When filling out the Colorado DR 0106EP form, it is important to follow specific guidelines to ensure accuracy and compliance. Here are some key dos and don’ts: