Income 51: Estimated Income Tax - Department Of Revenue Page 6
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6No estimated tax penalty is due if a C corporation’s net tax liability is less than $5,000. For short tax years, this
$5,000 threshold will be prorated based upon the length of the tax year, by multiplying $5,000 times the number of
months in the tax year and dividing by 12. For example, for a nine month tax year, a C corporation will owe no
estimated tax penalty if its net tax liability is less than $3,750 ($5,000 times 9 divided by 12).
ESTATES AND TRUSTS
Colorado law does not require estimated tax payments for estates or trusts. However, a fiduciary may voluntarily make
estimated payments for an estate or trust with the Estate/Trust Estimated Tax Payment Form (105EP).
COMPOSITE RETURNS
Partnerships and S corporations (collectively referred to as “pass-through entities) may file composite returns on behalf
of some or all of their nonresident partners and shareholders (collectively referred to as “nonresident members”). Pass-
through entities are not required to make estimated payments, but individual nonresident members included in a
composite return may be subject to the estimated payment requirements discussed in this FYI if their individual net
Colorado tax liabilities exceed $1,000. Pass-through entities may use the Composite Nonresident Estimated Tax Payment
Form (106EP) to remit payments on behalf of any nonresident member included in a composite who is subject to
estimated payment requirements. Any estimated tax penalty due for a nonresident member included in a composite
return will be computed on the individual level using the Form 204.
ADDITIONAL RESOURCES
Colorado statutes and regulations
§ 39-22-605, C.R.S. and Dept. Rule 39-22-605 (estimated payments for individuals)
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§ 39-22-606, C.R.S. and Dept. Rule 39-22-606 (estimated payments for C corporations)
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Colorado forms, publications, and guidance
FYI General 11 (for annual interest rates)
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Form 204 (for calculation of estimated tax penalty for individuals)
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Form 205 (for calculation of estimated tax penalty for C corporations)
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(to make estimated payments electronically)
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Federal laws
26 U.S.C. 6655 and 26 CFR 1.6655-4 (definition of “large corporation” for estimated tax purposes)
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IRS forms, publications, and guidance
IRS Publication 505 (estimated tax for individuals)
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IRS Form 2210 (federal estimated tax penalty for individuals)
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IRS Form 2220 (federal estimated tax penalty for C corporations)
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IRS Form 1120-W (estimated tax for C corporations)
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FYIs provide general information concerning a variety of Colorado tax topics in simple and straightforward language. Although the FYIs represent a good
faith effort to provide accurate and complete tax information, the information is not binding on the Colorado Department of Revenue, nor does it
replace, alter, or supersede Colorado law and regulations. The Executive Director, who by statute is the only person having the authority to bind the
Department, has not formally reviewed and/or approved these FYIs.
Page 6 of 6 (01/17)
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