(1) Every
individual subject to taxation under the provisions of this article shall make and file
estimated payments in the amounts and as otherwise specified in this section.
(2) As used in this section, unless the context otherwise requires:
(a) An individual is a farmer or fisherman for any taxable year if:
(I) The individual's gross income from farming or fishing for the taxable year
is at least two-thirds of the total gross income from all sources for the taxable year;
or
(II) The individual's gross income from farming or fishing shown on the return
of the individual for the preceding taxable year is at least two-thirds of the total
gross income from all sources shown on such return.
(b) Return means a Colorado return required to be made or filed under
section 39-22-601.
(c) Tax or tax liability means the tax imposed under this article 22 minus
the credits against tax provided by this article 22 other than the credits against tax
for withholding pursuant to sections 39-22-601 (4), 39-22-604, and 39-22-604.5
and the credits against tax for the sales tax refund pursuant to section 39-22-2003
and the refund of excess state revenues from all sources pursuant to section 39-22-2004.
(3) Except as otherwise provided in this section, in the case of any
underpayment of estimated tax by an individual, there shall be added to the tax
under this article for the taxable year an amount determined by applying the rate of
interest established under section 39-21-110.5 to the amount of the underpayment
for the period of the underpayment. The penalty imposed by this section shall be
the only penalty imposed for underpayment of the estimated tax required by this
section.
(4) For purposes of subsection (3) of this section:
(a) The amount of the underpayment shall be the excess of the required
installment over the amount, if any, of the installment paid on or before the due
date for the installment.
(b) The period of the underpayment shall run from the due date for the
installment to whichever of the following dates is earlier:
(I) The fifteenth day of the fourth month following the close of the taxable
year; or
(II) With respect to any portion of the underpayment, the date on which such
portion is paid.
(c) For purposes of subparagraph (II) of paragraph (b) of this subsection (4), a
payment of estimated tax shall be credited against unpaid required installments in
the order in which such installments are required to be paid.
(5) For purposes of this section:
(a) There shall be four required installments for each taxable year.
(b) Except as provided in paragraph (c) of this subsection (5), in the case of
the following required installments, the due date shall be as follows:
Installment Due date
1st April 15
2nd June 15
3rd September 15
4th January 15 of the following taxable year
(c) If the due date of any installment payment required pursuant to this
section falls on a legal federal holiday, then the due date shall be delayed and due
on the adjusted federal due date.
(6) For purposes of this section, the amount of the required installments
shall be as follows:
(a) The amount of any required installment shall be twenty-five percent of
the required annual payment.
(b) For purposes of paragraph (a) of this subsection (6), the term required
annual payment means the lesser of:
(I) Seventy percent of the taxpayer's actual Colorado tax liability shown on
the return for the taxable year or, if no return is filed, seventy percent of the tax for
such year; or
(II) (A) One hundred percent of the taxpayer's actual Colorado tax liability
shown on the return of the individual for the preceding taxable year.
(B) Sub-subparagraph (A) of this subparagraph (II) shall not apply if the
preceding taxable year was not a taxable year of twelve months or if the individual
did not file a Colorado return for such preceding taxable year.
(c) Limitation on use of preceding year's tax:
(I) If the taxpayer's federal adjusted gross income shown on the return of the
individual for the preceding taxable year beginning in any calendar year exceeds
one hundred fifty thousand dollars, sub-subparagraph (A) of subparagraph (II) of
paragraph (b) of this subsection (6) shall be applied by substituting one hundred ten
percent for one hundred percent.
(II) In the case of a taxpayer who may legally file a joint federal return but
actually files a separate return for the taxable year for which the amount of the
installment is being determined, subparagraph (I) of this paragraph (c) shall be
applied by substituting seventy-five thousand dollars for one hundred fifty
thousand dollars.
(III) For purposes of returns for the 2001 tax year, the limitation described in
this paragraph (c) shall not apply.
(d) When the taxpayer has elected annualized installments for the payment
of federal income tax, the amount of the required installment pursuant to this
section and the calculation of any addition to tax shall be determined under rules
promulgated by the department of revenue.
(7) (a) No addition to tax shall be imposed under subsection (3) of this
section for any taxable year if the tax shown on the return for such taxable year or,
if no return is filed, the tax, reduced by the credits allowable under sections 39-22-601 (4), 39-22-604, 39-22-604.5, and 39-22-2003, is less than one thousand
dollars.
(b) No addition to tax shall be imposed under subsection (3) of this section
for any taxable year if:
(I) The preceding taxable year was a taxable year of twelve months;
(II) The individual did not have any liability for tax for the preceding taxable
year; and
(III) The individual was a resident of Colorado throughout the preceding
taxable year.
(c) No addition to tax shall be imposed under subsection (3) of this section
with respect to any underpayment to the extent the executive director determines
that the underpayment was due to good cause shown by the taxpayer.
(d) No addition to tax shall be imposed under subsection (3) of this section
with respect to any underpayment if the executive director determines that:
(I) The taxpayer either retired after having attained age sixty-two or became
disabled in the taxable year for which estimated payments were required to be
made or in the taxable year preceding such taxable year; and
(II) Such underpayment was due to reasonable cause and not to willful
neglect.
(8) (a) For purposes of applying this section, the amount of the credits
allowed under sections 39-22-601 (4), 39-22-604, 39-22-604.5, and 39-22-2003
for the taxable year shall be deemed a payment of estimated tax and an equal part
of such amount shall be deemed paid on each due date for such taxable year,
unless the taxpayer establishes the dates on which all amounts were actually
withheld, in which case the amounts so withheld shall be deemed payments of
estimated tax on the dates on which such amounts were actually withheld.
(b) The taxpayer may apply subsection (8)(a) of this section separately with
respect to the following:
(I) Wage withholding; and
(II) All other amounts withheld for which credits are allowed under sections
39-22-601 (4), 39-22-604, 39-22-604.5, and 39-22-2003.
(9) If, on or before January 31 of the following taxable year, the taxpayer files
a return for the taxable year and pays in full the amount computed on the return as
payable, then no addition to tax shall be imposed under subsection (3) of this
section with respect to any underpayment of the fourth required installment for the
taxable year.
(10) For purposes of this section, if an individual is a farmer or fisherman for
any taxable year:
(a) There shall be only one required installment for the taxable year;
(b) The due date for the installment shall be January 15 of the following
taxable year;
(c) The amount of the installment shall be equal to the required annual
payment determined under paragraph (b) of subsection (6) of this section by
substituting fifty percent for seventy percent and without regard to paragraph (c)
of said subsection (6); and
(d) Subsection (9) of this section shall be applied by:
(I) Substituting March 1 for January 31; and
(II) Treating the required installment described in paragraph (a) of this
subsection (10) as the fourth required installment.
(11) (a) In applying this section to a taxable year beginning on any date other
than January 1, there shall be substituted, for the months specified in this section,
the months that correspond thereto.
(b) This section shall be applied to taxable years of less than twelve months
in accordance with rules prescribed by the department of revenue.
(12) Two taxpayers who file a joint federal declaration of estimated tax shall
file a joint Colorado declaration of estimated tax. In such case, if such taxpayers do
not file a joint Colorado return for the taxable year, the estimated tax may be
treated as the estimated tax of either taxpayer or may be divided between them.
(13) All of the provisions of this section shall also apply to nonresident or
part-year resident taxpayers.
(14) All of the provisions of this article and article 21 of this title relating to
the powers of the executive director for the administration, assessment, and
enforcement of taxes required to be paid under this article shall apply to the
provisions of this section.
(15) The department of revenue shall prescribe such rules as may be
necessary to carry out the purposes of this section. Such rules shall be
promulgated in accordance with article 4 of title 24, C.R.S.