A Colorado partnership or S corporation that has made the SALT Parity Act election owes quarterly Colorado PTE estimated tax payments whenever its net Colorado tax liability for the year is expected to exceed $5,000.1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act Payments go in on the same April, June, September, and January schedule used by individual filers, and the entity submits them through Revenue Online or by mail with Form DR 0106EP.
Who Has to Pay
The $5,000 threshold is the trigger. If the entity’s projected Colorado tax at the entity level will come in under that number, no quarterly payments are required and the full amount can be paid with the annual return. Above it, four installments are mandatory.
Only electing pass-through entities owe these payments at all. The election is available to S corporations and partnerships, including general partnerships, limited partnerships, and limited liability partnerships. Sole proprietorships and single-member LLCs disregarded for federal purposes do not qualify.2Justia Law. Colorado Revised Statutes Title 39 Section 39-22-343 – Election The election is annual and irrevocable once made, and it binds all partners or shareholders, with the sole exception of C corporation partners that are unitary with the partnership.1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act
An entity planning to pay quarterly during the year should file Form DR 1705 to lock in the election early, rather than waiting until the DR 0106 is filed after year-end.3Department of Revenue – Taxation. DR 1705 – SALT Parity Act Election Form
Quarterly Due Dates
Calendar-year entities owe four installments:
- First quarter: April 15
- Second quarter: June 15
- Third quarter: September 15
- Fourth quarter: January 15 of the following year
When a due date lands on a Saturday, Sunday, or legal holiday, the deadline rolls to the next business day.4Colorado Department of Revenue – Taxation. Individual Income Tax – Estimated Payments Fiscal-year filers use the same pattern mapped to their accounting period: the 15th day of the 4th, 6th, and 9th months of the fiscal year, then the 1st month of the following year.5Cornell Law Institute. Colorado Code 39-22-605 – Estimated Individual Income Tax
At least 90% of the total tax liability must be in by the original due date of the return to avoid the late payment penalty.6Department of Revenue – Taxation. Partnership and S Corporation Filing Information The automatic six-month extension to October 15 extends only the filing deadline, not the payment deadline.
Calculating Each Installment
The entity-level tax equals Colorado taxable income multiplied by the applicable income tax rate. For recent tax years that rate has been 4.40%, with a mechanism that can drop it to 4.25% retroactively if the state hits certain revenue targets.7Department of Revenue – Taxation. Individual Income Tax – Frequently Asked Questions Use 4.40% for estimated payment purposes and adjust later if a reduction is announced for the year.
The taxable income base aggregates each member’s share of entity income, gains, losses, and deductions. Resident members’ full distributive share is included; nonresident members contribute only their Colorado-source share. Any member whose net income from the entity is negative is excluded from the calculation rather than reducing the base.8Colorado Department of Revenue. Income Tax Topics: SALT Parity Act
A simple example: $200,000 of projected Colorado taxable income at 4.40% produces an $8,800 liability. That clears the $5,000 threshold, so four installments of $2,200 each are due. Recalculate before every quarterly date. If income is tracking higher or lower than expected, adjust the remaining installments; sticking with a stale number is how underpayment interest builds up.
How to Submit the Payment
Revenue Online is the fastest route. After logging in, select the estimated payment option for pass-through entities and authorize an electronic funds transfer from a verified business bank account. The system issues an immediate confirmation number.9Department of Revenue – Taxation. Business Income Tax – Estimated Payments
To pay by mail, make the check payable to the Colorado Department of Revenue and send it with a completed Form DR 0106EP, the Partnership and S Corporation Estimated Income Tax Payment form. The correct form number is DR 0106EP, not DR 0106P. Mail to:10Colorado Department of Revenue. Colorado Partnership and S Corporation Estimated Income Tax
Colorado Department of Revenue
Denver, CO 80261-0008
The form requires the entity’s name, address, federal employer identification number, the tax year, and the payment amount. The FEIN is the single most important field. A wrong number means the payment will not post to the right account. Certified mail creates a delivery record for any later dispute, and checking Revenue Online a few business days after mailing confirms the payment posted where it should.
What Happens If You Underpay
Colorado charges interest on unpaid tax from the original due date until the tax is paid. For 2026 the discounted rate is 8% and the regular rate is 11%. The discounted rate applies if the entity pays before receiving a notice of deficiency or within 30 days of receiving one. After that window, 11% applies.11Colorado Department of Revenue. Tax Topics: Penalties and Interest Interest accrues daily and does not cap, even if the entity enters a payment plan.
A separate late payment penalty for income tax equals the greater of $5 or 5% of the unpaid tax plus an additional 0.5% for each month or partial month the tax remains unpaid, capped at 12%.11Colorado Department of Revenue. Tax Topics: Penalties and Interest
The estimated installment penalty is calculated quarter by quarter. Interest runs on each quarter’s shortfall from that installment’s due date until the earlier of the annual return due date or the date the underpayment is actually paid.12Justia Law. Colorado Revised Statutes Title 39 Section 39-22-605 – Failure by Individual to Pay Estimated Income Tax Missing an April installment costs more than missing a September one, because the interest clock runs longer.