This worksheet helps you determine and calculate penalties for underpayment of individual estimated income tax. The Colorado Department of Revenue requires it when a taxpayer has not paid enough through withholding or quarterly estimated payments during the tax year.
The form applies if you owe more than $1,000 in Colorado income tax after withholding credits and your estimated payments fell short of the required annual payment. Farmers and fishermen follow a different calculation under Section D.
The required annual payment is the smaller of two amounts: 70% of the current year tax liability, or 100% of the prior year Colorado tax (110% if prior year income exceeded $150,000). Paying at least the required amount avoids any underpayment penalty.
The DR 0204 has four main sections. Section A identifies exceptions that may eliminate the penalty entirely. Section B calculates the required annual payment amount. Section C computes the actual penalty by quarter. Section D provides the annualized installment method for taxpayers whose income varied significantly throughout the year.
Submit the completed form with your Colorado individual income tax return, Form DR 0104. For calendar year filers, the due date is April 15 of the following tax year. If you owe a penalty, the amount from this worksheet carries over to your tax return.
| Question | Answer |
|---|---|
| Form Name | Colorado DR 0204 (Underpayment Penalty Worksheet) |
| Form Length | 2 pages |
| Fillable? | No |
| Fillable fields | 0 |
| Avg. time to fill out | 30 sec |
| Other names | Underpayment, dr0204, 2012, co form dr 0204 |