Outline
The Colorado DR 0106EP form serves as a vital tool for nonresident individuals who need to manage their estimated tax payments for the year. Specifically designed for the 2014 tax year, this form helps taxpayers calculate their expected Colorado taxable income and the corresponding income tax, which is set at a rate of 4.63%. It allows users to account for any applicable credits, thereby determining the net estimated tax owed. The form also provides a structured payment schedule, outlining four due dates throughout the year, ensuring that individuals can plan their finances accordingly. Additionally, it emphasizes the importance of timely payments, as failure to do so may result in penalties. For those who prefer a more streamlined approach, electronic payment options are available, making it easier to remit taxes without the hassle of paper forms. The DR 0106EP also includes specific instructions on how to fill out the form accurately, catering to the unique needs of nonresidents earning income sourced from Colorado. By using this form, individuals can ensure compliance with state tax laws while effectively managing their financial obligations.
Sample - Colorado Dr 0106Ep Form
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
notied in writing prior to ling the DR 0106. Mail this
notication to:
Colorado Department of Revenue
Denver, CO 80261-0008
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 specics, or to remit this penalty before
being billed, see form DR 0204, Underpayment of
Individual Estimated Tax (composite lers) 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 led.
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 led 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.
Colorado Pass-Through Entity Estimated Income Tax
Instructions
DR 0106EP (10/19/22)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0008
Tax.Colorado.gov
=DO=NOT=SEND=
DR 0106EP (10/19/22)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0008
Tax.Colorado.gov
Page 1 of 1
2023 Colorado Pass-Through Entity Estimated Tax
Payment Form
(0042)
*230106EP19999*
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 scal 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)
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 insufcient or uncollected funds, the Department of Revenue
may collect the payment amount directly from your bank account electronically.
Amount of Payment
$
DO NOT CUT – Return Full Page. IF NO PAYMENT IS DUE, DO NOT FILE THIS FORM.
Form Information
| Fact Name | Details |
|---|---|
| Form Title | 2014 Colorado Estimated Tax — Composite Nonresident Worksheet |
| Governing Law | Colorado Revised Statutes, Title 39, Article 22 |
| Form Number | DR 0106EP |
| Submission Method | Send the completed form with payment via check or money order to the Colorado Department of Revenue. |
| Payment Due Dates | April 15, June 15, September 15, January 15, 2015 |
| Estimated Tax Calculation | Tax is calculated at 4.63% of the estimated Colorado taxable income. |
| Eligibility | This form is for nonresident individuals included in a composite filing. |
| Penalties | Late payments incur an Estimated Tax Penalty unless exceptions apply. |
| Refund Policy | Estimated tax payments can only be claimed as prepayment credit on the 2014 Colorado income tax return. |
Detailed Guide for Filling Out Colorado Dr 0106Ep
To fill out the Colorado DR 0106EP form, follow these steps carefully. Ensure all information is accurate and complete to avoid any issues with your estimated tax payments. The form must be submitted with payment if applicable, according to the provided due dates.
- Enter your estimated 2014 Colorado taxable income in the first line.
- Calculate your estimated Colorado income tax by multiplying the amount from line 1 by 4.63%. Write this amount on line 2.
- List any estimated 2014 Form 106CR credits you expect to claim on line 3.
- Subtract the amount on line 3 from the amount on line 2. Write the result on line 4 as your net estimated tax.
- Fill in the payment number and the net amount due for each of the four quarterly payments. Include any overpayment applied from the previous year, if applicable.
- Provide your organization’s name, FEIN, Colorado account number, address, city, state, and zip code in the designated sections.
- Indicate the due date for each payment, using the format MM/DD/YY.
- Write the amount of payment you are submitting in the appropriate section.
- Detach the form along the designated line and send only the coupon with your payment, if not paying online or by EFT.
- Ensure your check or money order is payable to the Colorado Department of Revenue, and include your Colorado Account Number and “2014 Form 0106EP” on it.
Obtain Answers on Colorado Dr 0106Ep
-
What is the purpose of the Colorado DR 0106EP form?
The Colorado DR 0106EP form is used by nonresident individuals to make estimated tax payments for income earned in Colorado. This form is specifically for those included in a composite filing under Form 106. It helps ensure that individuals pay the appropriate amount of tax on income that is not subject to withholding.
-
Who needs to file the DR 0106EP form?
Individuals who are not residents of Colorado and expect to owe more than $1,000 in tax for the year after accounting for any withholding or refundable credits must file this form. Each individual included in the composite return must calculate their estimated tax separately, rather than as a group.
-
How do I calculate my estimated tax payment?
To calculate your estimated tax payment, you will need to follow these steps:
- Determine your estimated Colorado taxable income for the year.
- Calculate your estimated tax by applying the 4.63% tax rate to your taxable income.
- Subtract any applicable credits from your estimated tax to find your net estimated tax.
Use the worksheet provided with the form to assist in this calculation. Make sure to submit your payments according to the due dates listed on the form.
-
What happens if I miss a payment deadline?
If you fail to remit your estimated tax payments on time, you may incur an Estimated Tax Penalty. This penalty applies to each missed or late payment. However, exceptions exist for farmers and fishermen who file and remit full payment by March 1. For details on how to calculate the penalty or to remit it before being billed, refer to Form 204.
Common mistakes
Filling out the Colorado DR 0106EP form can be a straightforward process, but many people make common mistakes that can lead to complications. One frequent error is miscalculating the estimated taxable income. Individuals often underestimate or overestimate their income, which can significantly affect the tax amount owed. It’s essential to review all income sources thoroughly before entering the figure on line 1.
Another common mistake involves neglecting to account for all available credits. On line 3, individuals should include any Form 106CR credits they qualify for. Failing to do so can result in a higher net estimated tax amount on line 4. It’s crucial to take the time to gather all relevant documentation to ensure that no credits are overlooked.
Many people also forget to check the due dates for payments. The form outlines specific dates for each payment due, and missing these deadlines can lead to penalties. It’s advisable to mark these dates on a calendar or set reminders to avoid any late fees. Staying organized is key to managing tax obligations effectively.
Additionally, some individuals mistakenly send cash instead of a check or money order. The Colorado Department of Revenue specifically instructs against sending cash, as it can lead to lost payments and complications. Always ensure that payments are made using the accepted methods outlined in the form.
Lastly, failing to provide the correct Colorado Account Number can cause delays in processing payments. It’s important to double-check that the account number is accurate and clearly written on the check or money order. Taking these steps can help prevent unnecessary issues and ensure that the tax payments are processed smoothly.
Documents used along the form
The Colorado DR 0106EP form is an essential document for nonresident individuals who need to make estimated tax payments on Colorado-source income. Alongside this form, several other documents can play a crucial role in ensuring compliance with tax obligations. Below is a list of related forms and documents that are often used in conjunction with the DR 0106EP.
- Form 106: This is the Colorado Individual Income Tax Return form. Nonresidents use it to report their total income and calculate their tax liability for the year.
- Form 106CR: This form is used to claim credits for taxes paid to other states. It helps reduce the overall tax liability for nonresidents who have income sourced from multiple states.
- Form 204: This form is utilized to report and remit any estimated tax penalties. If payments are missed or late, this form helps taxpayers address those penalties promptly.
- Form DR 0106: This is the Composite Nonresident Income Tax Return. It consolidates the income of multiple nonresident partners into one return, simplifying the filing process.
- Form 104: This is the Colorado Individual Income Tax Return for residents. Nonresidents may refer to it for guidance on tax laws and rates applicable to their situation.
- Form DR 0104EP: This is the Estimated Income Tax Payment form for residents. It serves as a reference for nonresidents on how to calculate and remit estimated payments.
- Form DR 0104N: This form is specifically for nonresidents to report their income from Colorado sources. It helps clarify what income is taxable in Colorado.
- FYI Publications: These publications provide detailed information and guidance on various tax topics, including estimated taxes and credits. They are a valuable resource for taxpayers.
- Revenue Online: This online portal allows taxpayers to file taxes, make payments, and monitor their accounts electronically. It simplifies the process and can help avoid penalties.
- Electronic Funds Transfer (EFT): This is a method for making tax payments electronically. It is a convenient option for those who want to ensure timely payments without the hassle of mailing checks.
Understanding these forms and documents can greatly aid in navigating Colorado's tax landscape. Each serves a specific purpose, and together they help ensure that nonresident taxpayers meet their obligations while minimizing potential penalties. For further assistance, consider reaching out to a tax professional or the Colorado Department of Revenue.
Similar forms
The Colorado DR 0106Ep form is a specific document used for nonresident individuals to report estimated tax payments. Several other forms share similarities with it, primarily in their purpose of reporting estimated taxes or income. Below is a list of six documents that are comparable to the DR 0106Ep form:
- Form 1040-ES: This is the Estimated Tax for Individuals form used by U.S. residents to report and pay estimated taxes on income not subject to withholding. Like the DR 0106Ep, it requires an estimation of taxable income and tax liability.
- Form 1065: This form is used by partnerships to report income, deductions, and credits. It shares the composite filing aspect with the DR 0106Ep, as it can include multiple partners’ income in one return.
- Form 1120-W: This is the Estimated Tax for Corporations form. Corporations use it to calculate and pay estimated taxes, similar to how nonresident individuals use the DR 0106Ep for their estimated tax obligations.
- Form 1041-ES: This form is used for estimated tax payments for estates and trusts. It functions similarly to the DR 0106Ep by requiring estimates of income and tax liability for nonresident entities.
- Form 990-T: This form is for unrelated business income tax. Nonprofit organizations use it to report income not related to their exempt purpose. It is similar in that it requires reporting of income and tax calculations.
- Form 8862: This form is used to claim the Earned Income Credit after it was previously denied. While its primary purpose differs, it also involves reporting income and tax-related information, akin to the DR 0106Ep.
Dos and Don'ts
When filling out the Colorado DR 0106EP form, it's important to follow certain guidelines to ensure accuracy and compliance. Here’s a list of things you should and shouldn’t do:
- Do read the instructions carefully before starting.
- Do provide accurate information for each line item.
- Do double-check your calculations, especially the estimated tax amount.
- Do submit your payment on time to avoid penalties.
- Don't send cash with your form.
- Don't forget to include your Colorado Account Number on your payment.
- Don't staple or attach your payment to the form.
- Don't file the form if no payment is due.
Following these tips can help make the process smoother and ensure that your estimated tax payments are handled correctly.
Misconceptions
There are several misconceptions regarding the Colorado DR 0106Ep form that can lead to confusion for taxpayers. Understanding the realities behind these misconceptions can help ensure compliance and avoid potential penalties. Below are six common misconceptions explained in detail.
- Misconception 1: The DR 0106Ep form is only for Colorado residents.
- Misconception 2: Filing this form guarantees a refund.
- Misconception 3: Payments made with this form are refundable at any time.
- Misconception 4: Only one payment is required each year.
- Misconception 5: Late payments do not incur penalties.
- Misconception 6: Electronic payments are not an option.
This form is specifically designed for nonresident individuals who earn income from Colorado sources. It allows them to report and pay estimated taxes on that income, ensuring they meet their tax obligations.
Filing the DR 0106Ep form does not guarantee a refund. Instead, it is used to make estimated tax payments, which can later be credited against the total tax liability when filing the annual return.
Estimated tax payments made using the DR 0106Ep form cannot be refunded until the Colorado income tax return is filed. This means that taxpayers must wait until they complete their annual return to see if they qualify for a refund.
Taxpayers must make four estimated tax payments throughout the year. These payments are due quarterly, and each payment must be calculated based on the individual's expected tax liability.
Failing to remit estimated tax payments on time can result in penalties. It is crucial for taxpayers to adhere to the payment schedule to avoid incurring additional costs.
In fact, electronic payments are highly encouraged. They are considered safe and efficient, allowing taxpayers to schedule payments in advance and avoid the hassle of mailing checks.
By clarifying these misconceptions, taxpayers can better navigate their responsibilities regarding the Colorado DR 0106Ep form and ensure compliance with state tax laws.
Key takeaways
Filling out and using the Colorado DR 0106EP form is an important task for nonresident individuals involved in composite filings. Here are some key takeaways to keep in mind:
- Purpose of the Form: The DR 0106EP is used to make estimated tax payments for nonresident individuals earning Colorado-source income.
- Eligibility: This form is specifically for nonresidents included in a composite filing. If no payment is due, do not file this form.
- Payment Calculation: Estimate your Colorado taxable income and calculate the tax owed at a rate of 4.63% on that income.
- Payment Schedule: Payments are due quarterly, with specific due dates: April 15, June 15, September 15, and January 15 of the following year.
- Submission Method: Payments can be submitted via check or money order, but electronic payments are strongly recommended to avoid delays.
- Penalties: Failing to make timely payments may result in penalties. Exceptions exist for farmers and fishermen who pay by March 1.
- Refund Policy: Estimated payments cannot be refunded until the Colorado income tax return is filed.
- Online Resources: Use the Colorado Department of Revenue's website for additional information and electronic payment options.
Understanding these points can help ensure compliance and streamline the tax payment process for nonresident individuals in Colorado.