Withholding 5: Colorado Wage Withholding Tax Requirements

Employers are required to have a Colorado withholding tax account and remit Colorado withholding taxes if an

employer pays wages that are subject to federal withholding for income tax purposes; and

1. The employer has employees performing work or services, either wholly or in part, in Colorado, OR

2. The employee is a Colorado resident working either inside or outside of Colorado, unless income tax is being

withheld for another state.

OPENING AN ACCOUNT

You can open a withholding tax account with the Colorado Department of Revenue (Department) online, by paper or

in person at a service center. There are no fees for opening a withholding account.



Online. Apply through Colorado Business Express

and receive a Colorado Account

Number (CAN) immediately. This online application can also open a sales tax license, if applicable.



Paper. If you cannot apply online, complete and mail in the Sales Tax Withholding Account Application (CR

0100AP). You will receive your CAN by mail. Please allow four to six weeks for processing.



Service Center. Apply for an account by visiting one of our service centers. A list of our service center locations

and hours is available on the Taxation website If visiting a service center, you must

bring:

A completed Sales Tax Withholding Account Application (CR 0100AP), and

If you applying for a sales tax account in addition to a wage withholding account, bring a check or money

order (no cash) to pay any fees, and

Valid driver license or ID. (If you are filing on behalf of someone else, a copy of their license or ID.)

CLOSING AN ACCOUNT

If a business no longer has employees, the wage withholding tax account must be closed within 30 days. If the

business has an existing Revenue Online account, the withholding tax account can be closed through Revenue Online

For more information on Revenue Online, see “Revenue Online” later in this FYI.

An account can also be closed by completing the Address Change or Business Closure Form (DR 1102) and sending the

completed form to the Department.

FILING FREQUENCY AND DUE DATES

Withholding tax must be deducted and paid in whole dollar amounts.

New Accounts

To determine the filing frequency for a new account, the employer shall estimate the amount of withholding tax that

the business expects to withhold from all employees in one year. Based on that estimate, the filing frequency for a

new account is quarterly, monthly, or weekly, described in more detail below.

Existing Accounts

The filing frequency for existing accounts is measured by the aggregate amount of withholding tax paid during the

preceding calendar year from January 1 through December 31. For example, the filing status for calendar year 2019

will be set by examining the amount of withholding tax remitted to the Department during calendar year 2018.

The Department will conduct an annual review to evaluate an employer’s filing frequency. Should the filing

frequency increase, the Department will notify the employer before January of the next calendar year. However, if

an employer is eligible to file less frequently, the Department will not automatically update the employer’s filing

frequency. The employer must contact the Department to request the filing period be less frequent. When

requesting a less frequent filing period, the employer must continue to file at the current frequency until the

Department provides notification of the filing frequency change, if approved. The filing frequency can be verified

through Revenue Online.

A withholding tax return must be filed for every filing period. If no taxes have been withheld during the filing period,

a return reporting “zero tax withheld” must be filed. When the due date falls on a weekend or holiday, taxes are

considered timely if they are paid on the first business day following the due date.

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Withholding 5: Colorado Wage Withholding Tax Requirements - Department Of Revenue

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