Department of Revenue - Taxation:Wage Withholding

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Wage Withholding

If a business has employees in Colorado it must collect and remit wage withholding taxes from employees. Colorado's individual (personal) income tax rate is a flat 4.63%.

Colorado does not have an equivalent state form to the federal W-4. This is because the state income tax is based on the taxpayer's federal taxable income. An employer should use the information from the federal W-4 Form to calculate the state wage withholding amounts.

Winnings

Income tax is withheld from horse and dog racing winnings if the amount won is greater than $5,000 and at least 300 times the wagered amount. Income tax is withheld from slot machine and bingo winnings if the amount won is $1,200 or more and the customer does not provide proper identification. The amount withheld is 4% of the gross winnings and is reported to the customer on form W-2G or 1042-S.