Anyone who receives income from oil or gas produced in Colorado must file a severance tax return. If you receive oil and gas income from Colorado sources, you must also complete and file a Colorado state income tax return. Individuals pay severance tax once a year on or before April 15th, therefore, individuals are not required to make estimated severance tax payments. Visit the How to File page for more information on filing a severance tax return.
It is not necessary to file a severance tax return if you meet both of the following conditions:
- The total gross oil and gas withholding on form(s) DR 0021W for the calendar year is less than $250, AND
- The producer has withheld sufficiently from royalty or production payments to cover the severance tax liability.