If you expect to owe more than $1,000 in Colorado income tax after withholding and credits, you need to make Colorado estimated tax payments four times a year: April 15, June 15, September 15, and January 15 of the following year. You can avoid an underpayment charge by paying at least 70% of this year’s tax or 100% of last year’s (110% if your federal AGI topped $150,000). Payments go through Revenue Online or by mail with Form DR 0104EP.
Who Has to Pay
Colorado Revised Statutes Section 39-22-605 sets the trigger at $1,000. If your net Colorado tax liability for the year, after withholding and refundable credits, will exceed that amount, you should be making estimated payments.1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax This catches most self-employed workers, freelancers, landlords, and anyone with significant investment income that isn’t withheld by an employer.
There is a full exemption if you owed zero Colorado tax the prior year, that year covered a full 12 months, and you were a Colorado resident the whole time.1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax If that describes last year, you get a pass this year even if your income has grown.
Quarterly Due Dates
Payments are due in four installments:2Department of Revenue – Taxation. Individual Income Tax Estimated Payments
- 1st quarter: April 15
- 2nd quarter: June 15
- 3rd quarter: September 15
- 4th quarter: January 15 of the following year
When a due date lands on a Saturday, Sunday, or legal holiday, it moves to the next business day.2Department of Revenue – Taxation. Individual Income Tax Estimated Payments Interest on a late installment runs from the original due date, not from when you notice the shortfall, so catching up in December doesn’t erase interest that started accruing in September.
Safe Harbors That Keep You Penalty-Free
You only need to clear one of three bars. Colorado’s thresholds don’t match the federal ones, which is where many taxpayers trip up.
- Pay at least 70% of your current-year Colorado tax. This is lower than the federal 90% safe harbor.1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax
- Pay 100% of the tax shown on last year’s Colorado return, provided the prior year was a full 12 months, you filed a Colorado return, and your federal AGI was $150,000 or less ($75,000 or less if married filing separately).1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax
- Pay 110% of last year’s Colorado tax if your prior-year federal AGI exceeded $150,000.1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax
Your required annual payment is whichever of these produces the smallest number. Divide by four and that’s each installment.
How to Figure the Payment
Colorado’s base individual income tax rate is a flat 4.40%.3Colorado General Assembly. Individual Income Tax A 2024 law (SB 24-228) authorizes temporary reductions through 2034 tied to excess TABOR revenues. The rate was 4.25% for 2024 and returned to 4.40% for 2025.4Department of Revenue – Taxation. Individual Income Tax Guide Whether a reduction applies for 2026 depends on revenue calculations that may not be finalized until mid-year, so check the Department of Revenue’s current rate before preparing estimates.
Start with projected federal adjusted gross income, apply Colorado-specific additions and subtractions to get state taxable income, and multiply by the rate. Subtract expected credits and withholding. If what’s left is over $1,000, divide by four. The DR 0104EP instructions include a worksheet that walks through this calculation.5Colorado Department of Revenue. Individual Estimated Income Tax Instructions Rework the estimate after any major income change rather than waiting until filing time.
How to Pay
Revenue Online
The state’s Revenue Online portal is the fastest route. Pick the payment section, select estimated tax, and submit. E-check payments pull from a bank account at no cost. Credit and debit card payments carry a processing fee of (amount due + $0.75) × 2.25%.6Department of Revenue – Taxation. Payment Frequently Asked Questions On a $2,000 payment, that’s about $45. You get a digital confirmation and can schedule future payments in advance. Paying online means you don’t file the paper DR 0104EP at all; the form is only required when mailing a payment.5Colorado Department of Revenue. Individual Estimated Income Tax Instructions
By Mail
Complete Form DR 0104EP and send it with a check or money order to:7Department of Revenue – Taxation. DR 0104EP – Individual Estimated Income Tax Payment Form
Colorado Department of Revenue
Denver, CO 80261-0008
Write your Social Security number or ITIN on the check and note that it’s for estimated tax. The state treats a mailed payment as timely based on the postmark, so make sure the envelope is processed on or before the deadline.
When Your Income Arrives Unevenly
Four equal installments assume steady income. If most of your money comes in late in the year, you can use the annualized income installment method, which recalculates each installment from income actually earned through that quarter’s cutoff. The calculation is done on Form DR 0205, and you must also have elected annualized or adjusted seasonal installments for federal estimated tax.
Farmers and fishermen whose gross income is at least two-thirds from those activities follow a different schedule entirely: one payment of 50% of actual net Colorado tax, with the balance paid when the return is filed by March 1 of the following year.5Colorado Department of Revenue. Individual Estimated Income Tax Instructions
What an Underpayment Costs
Colorado’s underpayment penalty is an interest charge, not a flat fee, and it accrues from each installment’s due date until the tax is paid.1Justia. Colorado Code 39-22-605 – Failure by Individual to Pay Estimated Income Tax For 2026, there are two tiers. Pay before the Department of Revenue issues a notice of deficiency, or within 30 days of receiving one, and the discounted rate is 8%. Wait longer and the regular rate of 11% applies.8Department of Revenue – Taxation. Tax Topics: Penalties and Interest Interest spanning more than one calendar year can be calculated at different rates for each period, with the daily figure being the annual rate divided by 365 (or 366 in a leap year).
If you realize you’ve underpaid, fixing it quickly locks in the lower rate. Waiting for the state to catch the shortfall nearly guarantees the higher one.