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DR 0204 (11/21/22)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0005
Tax.Colorado.gov
Tax Year Ending Computation of Penalty Due Based on
Underpayment of Colorado Individual Estimated Tax
Instructions for DR 0204
Calculation of underestimated penalty (UEP) can be difcult. We strongly recommend ling electronically or
consulting a tax professional to reduce the likelihood of errors.
Review the Individual Income Tax Guide available at Tax.Colorado.gov for additional information regarding the
underpayment of Colorado individual estimated tax.
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 either of the exceptions are met.
Part 2: The required annual amount to be paid is the lesser
of:
• 70% of actual current year net Colorado tax
liability, or
• 100% of preceding year’s net Colorado tax liability
(This amount only applies if the preceding year
was a 12-month tax year, and the individual led
a Colorado return, and the federal adjusted gross
income for the preceding year was $150,000 or
less, or $75,000 or less if married ling separate.),
or
• 110% of preceding year’s net Colorado tax liability.
(This amount only applies if the preceding year
was a 12-month tax year and the individual led a
Colorado return.)
Part 3: If no exception applies to you, compute your penalty
on lines 7 through 19 of DR 0204. Complete each column
before going on to the next column. Allocate estimated tax
payment on line 8. The amount entered on line 10 is the
net overpayment from the preceding period. On line 17, if
the payment was made prior to January 1 enter “0.” If the
tax return is led and any tax due is paid by January 31
no penalty will be computed in column four. Estimated tax
payments from a farmer or sherman are due in a single
payment by January 15 and only column four is used to
compute the penalty. If the due date falls on a weekend or
federal holiday, payment will be due the next business day.
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 elect annualized installments for the
payment of their federal income tax. Complete the
annualized installment method schedule to compute the
amounts to enter on line 7.
This form should be included with your completed DR 0104 form.
Visit Tax.Colorado.gov for additional information regarding the estimated tax penalty.