Related Information

Question: How does a part-year resident or nonresident compute Colorado income tax?
Part-year residents and nonresidents will initially determine their Colorado taxable income as though they are full-year residents. However, they will then apportion the tentative tax in the ratio of Colorado adjusted gross income to total modified federal adjusted gross income. This calculation is explained below.

A part-year resident or nonresident of Colorado will complete the Colorado Form 104 and the 104PN part-year resident/nonresident tax calculation schedule.

Four steps to complete a part-year/nonresident tax return.

1. Income must be figured to determine the Colorado taxable income. Do not use the Other Subtractions line to subtract income attributed to another state. Doing so will result in a double deduction of that income and will be considered an error. Therefore, the Colorado taxable income will include income from all states and the 104PN Schedule shall be used to eliminate income that is not taxable to Colorado.

2. Use the calculated Colorado taxable income to determine the full-year tax (see the 104 tax table). Usually, this tentative tax will be much higher than the tax that is actually due. This amount has not been apportioned. Do not enter this amount on Form 104, but enter on line 35 of the 104PN schedule instead.

3. Complete the 104PN schedule, which will be used to determine what percentage of the modified gross income is taxable to Colorado. This percentage will then be applied to the tentative tax that was obtained from the tax table and the result will be the apportioned Colorado tax that is due and transferred to Form 104.

4. Complete Form 104 using the apportioned Colorado tax. Calculate any Colorado credit amounts to compute the refund or balance due.

For Further Information:
FYI Income 6
 

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