Colorado Corporate Estimated Tax Underpayment Penalty

Corporate Estimated Tax Underpayment Penalty
DR 0205 2023 Tax Year Ending Computation of Penalty Due Based on Underpayment of Colorado Corporate Estimated Tax and DR 0205
*DO=NOT=SEND*

DR 0205 (08/10/23)
COLORADO DEPARTMENT OF REVENUE
Tax.Colorado.gov

Tax Year Ending Computation of Penalty Due Based on
Underpayment of Colorado Corporate Estimated Tax
Instructions

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 the Colorado tax liability is less than $5,000.
Part 2: The required annual amount to be paid is the lesser of:
1.	70% of actual net Colorado tax liability, or
2.	100% of preceding year's Colorado tax liability only
applies if:
●	

The preceding year was 12-month tax year, and

●	

The corporation filed a Colorado return, and

●	

 he corporation is not defined under section 6655 of
T
the federal IRS code as a large corporation.*

*Large corporations can base their first quarter estimated
tax payment on 25% of the previous year's tax liability.
However, future payments must be based on the actual
tax liability for the current tax year and any underpayment
occurring in the first quarter as a result of this estimation
must be paid with the second quarterly payment.

Part 3: Compute the penalty on lines 10 through 22 of DR
0205. Complete each column before going to the next
column. The dates to be entered on line 10 are the 15th
day of the fourth, sixth, ninth and twelfth month of the
taxable year. Large corporations must complete line 11
based on the computations from line 9 or, if calculating
estimated payments using the annualized installment
method, line 29.
Corporations filing for a short tax year must adjust lines 9,
10 and 11 accordingly. For more information about filing
for short tax years, see the Corporate Income Tax Guide,
available at Tax.Colorado.gov
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
elected annualized installments or adjusted seasonal
installments for the payment of their federal income tax.
Complete the annualized installment method schedule to
compute the amounts to enter on line 11.

This form should be included with your completed DR 0112 form.
Visit Tax.Colorado.gov for additional information regarding the estimated tax penalty.

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DR 0205 (08/10/23)
COLORADO DEPARTMENT OF REVENUE
Tax.Colorado.gov
Page 1 of 2

2023 Tax Year Ending Computation of Penalty Due Based on
Underpayment of Colorado Corporate Estimated Tax
Corporation Name

Colorado Account Number

Part 1 — Exception
1.	 Enter the current year tax liability including any credit recapture after reduction for all
credits other than estimated tax and withholding tax payments

$

2.	 Statutory exemption

$

3.	 Subtract line 2 from line 1. If line 2 is larger, enter zero and no penalty is due.

$

Part 2 — Required Annual Payment
4.	 Enter the current year tax liability (including any credit recapture) after reduction for all
credits other than estimated tax and withholding tax payments
5.	 Enter 70% of the amount from line 4
6.	 Enter the previous year Colorado tax liability (including any credit recapture) after
reduction for all credits other than estimated tax and withholding tax payments. If you
did not file a previous year Colorado return, enter the amount from line 5 here and on
line 7

$
$

$

7.	 Required payment. Enter the smaller of lines 5 or 6
$
8.	 Does the taxpayer qualify as a large corporation under section 6655 of the federal IRS code?
Yes	

No

If yes, go to line 9. If no, skip to line 10

9.	 (a) Enter 25% of line 5

$

(b) Enter 25% of line 6

$

(c) Subtract line 9(b) from line 9(a). If line 9(b) is larger, enter 0 on this line.
1.	Enter the smaller of lines 9(a) or 9(b) on line 11 in column 1
2.	Enter the total of lines 9(a) and 9(c) on line 11 in column 2
3. Enter the amount from line 9(a) on line 11 in columns 3 and 4

$

5,000.00

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DR 0205 (08/10/23)
COLORADO DEPARTMENT OF REVENUE
Tax.Colorado.gov
Page 2 of 2

Corporation Name

Colorado Account Number

Part 3 — Penalty Computation
10.	 Enter each quarterly payment due date in
each column to the right on this line
11.	 Divide the amount on line 7 by four or enter
the payments due from line 9 or 29
$

Column 1

12.	 Amounts paid in estimated or withholding tax $
13.	 Overpayment (on line 15) from
preceding period

Column 2

Column 3

Column 4

$

$

$

$

$

$

$

$

$

14.	 Total of lines 12 and 13
$
$
$
15.	 Underpayment (subtract line 14 from line 11)
or <overpayment> (Subtract line 11 from line 14) $
$
$
16.	 Date of payment or December 31, current
year, whichever is earlier
17.	 Number of days from due date of payment
to date on line 16
18.	 Underpayment on line 15 multiplied by 8%
for dates in 2023 or multiplied by 11% for
dates in 2024 multiplied by number of days
on line 17 divided by 365 (366 for leap year) $
$
$
19.	 Date of payment or due date of return,
whichever is earlier
20.	 Number of days from December 31 or due
date of payment, whichever is later, to date
on line 19
21.	 Underpayment on line 15 multiplied by 8%
for dates in 2023 or multiplied by 11% for
dates in 2024 multiplied by number of days
on line 20 divided by 365 (366 for leap year) $
$
$
22.	 Total penalty. Add all amounts on lines 18 and 21. Include this amount as estimated tax penalty
on line 40, DR 0112	

$
$

$

$
$

Part 4 — Annualized Installment Method Schedule
23.	 Ending date of annualization period
24.	 Colorado taxable income computed through
the date on line 23
$
25.	 Annualization Factor
26.	 Annualized taxable income. Line 24
multiplied by line 25
$
27.	 Annualized Colorado tax. Line 26 multiplied
by 4.4%
$
28.	 Applicable percentage
29.	 Installment payment due. Line 27 multiplied by
line 28, subtract amounts entered on line 29 in
earlier quarters. Enter here and on line 11	
$

$
4

$
2.4

$
1.5

1.091

$

$

$

$

$

$

17.5%

35%

$

52.5%

$

70%

$