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Business Income Tax | Frequently Asked Questions

  1. Do I need to make estimated payments?
    Review the information on the Business Income Tax Estimated Payments page to determine if you are required to make estimated payments on your business income.
     
  2. I cannot pay my business income tax in full. Can I set up an Installment Agreement (Payment Plan)? 
    For information on how to request a payment plan, visit the Business Income Tax Installment Agreements web page. 
     
  3. Why do I need to file my business' federal return before my Colorado Income Tax Return?
    Colorado state income tax is different from federal income tax. You must determine your federal taxable income by preparing your federal return first. Then you can complete the Colorado return. For information on how to file your federal return, including links to services where you can file both federal and state returns free of charge, see the Internal Revenue Service website.
     
  4. How does my organizational structure impact filing income tax in Colorado?
    Each organizational structure has specific forms that you must use. Visit the Business Income Tax Organizational Structure web page to for more information.
     
  5. What form do I use if I want to file for an extension of time to file?
    Partnerships and S Corporations would use the DR 0158-N. C Corporations use the DR 0158-C. Please note these forms are only for an extension of time to file, not time to pay. Businesses should remit a minimum of 90% of their estimated taxes due on the income tax return due date. Visit the Business Income Tax Forms page to download forms for C corporations, partnerships, and S corporations.
     
  6. Does Colorado tax built-in gains?
    Colorado does not tax the built-in gains of an S Corporation, because an S Corporation is not directly subject to Colorado income tax.
     
  7. How do I request a copy of a return that was previously filed?
    Visit the Requesting Tax Return Copies web page for information on how to request return copies.
     
  8. How do I give my accountant or other tax professional access to my tax account?
    Visit the Third Party Access web page for information on how to give your tax professional access to your tax account.
     
  9. What if my business had a net operating loss?
    The Colorado net operating loss of a corporation is computed in the same manner as the federal net operating loss deduction except that in the case of a corporation apportioning income, it is that part of the federal net operating loss, as modified, that is from Colorado sources. Federal limitations on carryover losses between predecessor and successor corporations apply for Colorado income tax purposes.
     
  10. What if I operate a nonprofit?
    Organizations that have been granted exempt status by the Internal Revenue Service (IRS, federal taxes) are generally exempt from Colorado income taxation. However, those tax exempt entities that file Federal form 990-T to report unrelated business taxable income from Colorado sources or from business activity in Colorado are subject to Colorado income taxation and are required to file a corporation income tax return. Any insurance company subject to the tax imposed on gross premiums by §10-3-209, C.R.S. is exempt from Colorado income tax.

    If your organization is a charity, visit the Charitable Organizations web page for more information.
     
  11. How do you file a return for an LLC?
    A Limited Liability Company (LLC) is a business organizational structure that is allowed in Colorado. The Department will generally treat the income from your LLC in the same way as indicated on your federal income tax return. Review the LLC classification criteria on the Internal Revenue Service (IRS) website for more information. For example, if you filed as a partnership at the federal level, then you generally would file as a partnership in Colorado, as well. 
     
  12. What if I don't pay my business' tax liability?
    When you do not pay your tax in full when you file your return, if you paid late and owe penalty and interest or if you did not file a return and the Department filed one for you. When a Notice of Deficiency is issued, you have 30 days to notify the department if you disagree with the bill. Be sure to read the notice carefully to understand your rights and to see what documentation is required.

    Review FYI General 11 for more information on penalties and interest.

    If you do not pay, dispute or protest the bill within the allotted time, the Department will issue a Final Determination and Demand for Payment. Should you fail to pay the balance in full or start a monthly installment plan, CDOR may take certain actions to collect your unpaid taxes.

    Visit the Collections web page for information on the Collections process.