What is form DR 0004?
Form DR 0004 is the new Colorado Employee Withholding Certificate that is available for 2022. It is not meant to completely replace IRS form W-4 for Colorado withholding, but to help employees in a few specific situations fine-tune their Colorado withholding. You are not required to complete form DR 0004.
For most taxpayers, completing the Colorado Employee Withholding Certificate (DR 0004) may increase your take-home pay, reduce your Colorado withholding, and reduce your refund when you file your Colorado income tax return. Consider the amounts you enter carefully. If too little is withheld, then you will owe tax when you file your Colorado return, and you may owe a penalty.
If you do not complete form DR 0004, then your employer will calculate your Colorado income tax withholding based on your IRS form W-4.
Do I have to complete form DR 0004?
No, you are not required to complete form DR 0004.
Complete form DR 0004 if you want to adjust your Colorado withholding, including for the following reasons:
1) you earn most of your income from one job,
2) you expect to claim federal itemized deductions or the Colorado child tax credit, or
3) you expect significant income from sources that will not have withholding.
What do I do with form DR 0004, if I fill it out?
1) Give it to your employer; then they must calculate your Colorado withholding based on the amounts you entered.
2) If you have multiple jobs, complete a separate certificate for each one.
Please note that the Department of Revenue may review and adjust your withholding in order to prevent the evasion of Colorado income tax.