Form Dr 5774 - Eft Authorization - Individual Income Tax

DR 104EP (08/25/04) Web

COLORADO DEPARTMENT OF REVENUE

Denver CO 80261-0008

2005

COLORADO

Estimated Tax Vouchers for Individuals

INSTRUCTIONS

1. Who must pay estimated tax. Every resident of Colorado

month tax year, the individual filed a Colorado return and

and every nonresident with income from Colorado sources

the federal adjusted gross income for the preceding year

must pay estimated income tax if it can reasonably be expected

was $150,000 or less, $75,000 or less if married separate)

that the net Colorado income tax liability for the current

•

110% of the preceding year’s net Colorado tax liability

taxable year will exceed the Colorado sales tax refund and

(This amount only applies if the preceding year was 12-

withholding credits by $1,000 or more. See FYI Income 51 for

month tax year, and the individual filed a Colorado re-

more information.

turn.)

2. Due date for filing. Estimated tax payments are due in four

The net Colorado tax liability for purposes of estimated tax

equal installments on April 15, 2005, June 15, 2005, Septem-

computation is the total Colorado tax, alternative minimum

ber 15, 2005 and January 17, 2006. Payments will be credited

tax and recapture of prior year credits reported on the Colo-

against the earliest quarterly installment that is due for the tax

rado individual income tax return Form 104 less all credits

year regardless of when the payment is received. If the due

other than the state sales tax refund, withholding credits, and

date is a Saturday, Sunday or legal holiday, payment on the

estimated tax credits.

next business day is accepted as having been made on the due

8. Penalty for failure to pay estimated tax. The estimated tax

date.

penalty will be assessed if the required estimated payments are

3. Joint Returns. Any estimated tax payment submitted by a

not paid in a timely manner. The penalty will be the appropri-

married couple that will be filing a joint tax return must list the

ate Colorado income tax interest rate times the underpayment

same spouse first on both Form 104-EP and Form 104.

for each quarter times the underpayment period. This penalty

is computed on Form 204.

4. How to compute your estimated tax for 2005. You should

compute your 2005 estimated tax in the worksheet provided in

The estimated tax penalty will not be assessed if one of the

this booklet using the 2004 individual income tax instruction

following conditions is met:

booklet as a guide.

•

No penalty is due if the net Colorado tax liability minus

5. Annualized income installment method. Taxpayers who do

any prepayments and credits, other than the estimated tax

not receive income evenly during the year (for example,

payments and credits, is less than $1,000.

taxpayers who own a seasonal business or receive a lump sum

•

No penalty is due if the taxpayer is a farmer or fisherman

payment late in the year) may elect to use the annualized

and files a return with full payment of any tax due by

income installment method to compute their estimated tax

March 1 of the following tax year.

payments if they elect this method for their federal payments.

9. Refund of estimated tax. The 2005 estimated tax payments

This method allows taxpayers to pay estimated tax based on

and/or credits may only be claimed as prepayment credits on

income actually received during the preceding portion of the

the 2005 income tax return. Such payments and/or credits are

tax year.

not subject to refund except by the filing of such a return.

6. Application of 2004 overpayment. An estimated tax credit

10. Where to file. File estimated tax vouchers with the Colorado

resulting from an overpayment of tax on your 2004 income tax

Department of Revenue, Denver, Colorado 80261-0008. Make

return must be applied to the first estimated tax payments due.

checks or money orders payable to the Colorado Department

of Revenue.

7. Required estimated payments. The required annual amount

to be paid is the lesser of:

11. Additional Information. All forms, FYIs and other informa-

•

70% of the actual net Colorado tax liability

tion are available at: or you can call for

•

100% of the preceding year’s net Colorado tax liability

information at (303) 238-SERV (7378).

(This amount only applies if the preceding year was 12-

Colorado Department of Revenue

Forms, Information and E-Services

Form Dr 5774 - Eft Authorization - Individual Income Tax - 2005

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