Colorado Estimated Tax -- Individual Underpayment

Estimated Tax -- Individual Underpayment
DR 0204 Tax Year Ending Computation of Penalty Due Based on Underpayment of Colorado Individual Estimated Tax
DR 0204 (08/14/23)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0005
Tax.Colorado.gov

*DO=NOT=SEND*

Tax Year Ending Computation of Penalty Due Based on
Underpayment of Colorado Individual Estimated Tax
Instructions for DR 0204

Calculation of underestimated penalty (UEP) can be difficult. We strongly recommend filing electronically or
consulting a tax professional to reduce the likelihood of errors.
Review the Individual Income Tax Guide available at Tax.Colorado.gov for additional information regarding the
underpayment of Colorado individual estimated tax.
Part 1: Generally you are subject to an estimated tax
penalty if your current year estimated tax payments are not
paid in a timely manner. The estimated tax penalty will not
be assessed if either of the exceptions are met.
Part 2: The required annual amount to be paid is the lesser
of:
• 70% of actual current year net Colorado tax
liability, or
• 100% of preceding year’s net Colorado tax liability
(This amount only applies if the preceding year
was a 12-month tax year, and the individual filed
a Colorado return, and the federal adjusted gross
income for the preceding year was $150,000 or
less, or $75,000 or less if married filing separate.),
or
• 110% of preceding year’s net Colorado tax liability.
(This amount only applies if the preceding year
was a 12-month tax year and the individual filed a
Colorado return.)

Part 3: If no exception applies to you, compute your penalty
on lines 7 through 19 of DR 0204. Complete each column
before going on to the next column. Allocate estimated tax
payment on line 8. The amount entered on line 10 is the
net overpayment from the preceding period. On line 17, if
the payment was made prior to January 1 enter “0.” If the
tax return is filed and any tax due is paid by January 31
no penalty will be computed in column four. Estimated tax
payments from a farmer or fisherman are due in a single
payment by January 15 and only column four is used to
compute the penalty. If the due date falls on a weekend or
legal holiday, payment will be due the next business day.
Part 4: Taxpayers who do not receive income evenly
during the year may elect to use the annualized income
installment method to compute their estimated tax
payments if they elect annualized installments for the
payment of their federal income tax. Complete the
annualized installment method schedule to compute the
amounts to enter on line 7.

This form should be included with your completed DR 0104 form.
Visit Tax.Colorado.gov for additional information regarding the estimated tax penalty.

DR 0204 (08/14/23)
COLORADO DEPARTMENT OF REVENUE
Tax.Colorado.gov
Page 1 of 2

*230204==19999*
Taxpayer’s Last Name

First Name

Middle Initial

SSN or ITIN

Part 1 — Exceptions
Exception Number 1
If at least two-thirds of your gross income for the current or prior year is from farming or fishing and
you file your current year return and you pay the full amount of tax due on or before March 1, you
are not subject to the estimated tax penalty. If you meet this criteria but do not file and pay the full
amount of tax due on or before March 1, check the box here and complete the remainder of the form.
Exception Number 2
1. Enter your current year tax liability (including alternative minimum tax and any credit recapture)
after reduction for all credits other than withholding tax and estimated tax payments.
$
2. (a) Statutory exemption

$ 1,000.00

(b) Current year Colorado income tax withheld from wages and/or nonresident real estate transactions

$

(c) Total of lines 2(a) and 2(b)

$

3. Subtract line 2(c) from line 1. If 2(c) is larger, enter zero and no penalty is due.
Part 2 — Required Annual Payment
4. (a) Enter your current year tax liability (including alternative minimum tax and any credit recapture)
after reduction for all credits other than withholding tax and estimated tax payments.
(b) Enter 70% of the amount on line 4(a). If you checked the box for exception number 1 above
only enter 50% of the amount on line 4(a).
5. (a) Enter your previous year tax liability (including alternative minimum tax and any credit recapture)
after reduction for all credits other than withholding tax and estimated tax payments.
(b) If your previous year federal adjusted gross income is greater than $150,000 (greater than
$75,000 if married filing separate), enter 10% of line 5(a). If not, enter 0. If you checked the
box for exception number 1 above enter 0.
(c) Enter total of lines 5(a) and 5(b)

$
$
$
$
$
$

6. Required payment. Enter the smaller of lines 4(b) or 5(c)
$
Payment Due Dates (see instructions)
Part 3 — Penalty Computation
7. Divide the amount on line 6
April 15
June 15
Sept 15
by four. Enter the result in the
appropriate column. If you
checked the box for exception
number 1 above, enter $0 in
the first three columns and the
amount on line 6 in the final
column (January 15).
$
$
$
$
8. Amounts paid in estimated tax
9. Amount of income tax withheld
from wages and/or nonresident
real estate transactions
10. Overpayment (on line 12) from
previous period

$

$

$

$

$

$

$

$

$

$

$

11. Total of lines 8, 9, and 10

$

$

$

$

January 15

DR 0204 (08/14/23)
COLORADO DEPARTMENT OF REVENUE
Tax.Colorado.gov
Page 2 of 2

*230204==29999*
Taxpayer’s Last Name

First Name

Middle Initial

SSN or ITIN

12. Underpayment (subtract line 11
from line 7) or <overpayment>
(subtract line 7 from line 11)
$
$
$
13. Date of payment or December 31,
whichever is earlier
14. Number of days from due date of
payment to date on line 13
15. Underpayment on line 12
multiplied by 8% multiplied
by number of days on line 14
divided by 365 (366 for leap year) $
$
$
16. Date of payment or April 15,
whichever is earlier
17. Number of days from
December 31, or due date of
payment, whichever is later, to
date on line 16
18. Underpayment on line 12
multiplied by 11% multiplied by
number of days on line 17 divided
by 365 (366 for leap year)
$
$
$
19. Total penalty. Add all amounts on lines 15 and 18. Include this amount as estimated tax penalty
on line 42 of form DR 0104

Part 4 — Annualized Installment Method Schedule

20. Ending date of
annualization period
21. Colorado taxable income computed
$
through the date on line 20
22. Annualization factor
23. Annualized taxable income
$
line 21 multiplied by line 22
24. Annualized Colorado tax
$
line 23 multiplied by 4.4%
25. Applicable percentage
26. Installment payment due.
Line 24 multiplied by line 25,
subtract amounts entered on
line 26 in earlier quarters.
$
Enter here and on line 7.

March 31

4

May 31
$

2.4

$
17.5%

35%

$

$
$

August 31
$

1.5

$

$

$

December 31
$

1

$

$

52.5%

$

$

70%

$