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%.
I need to...
- W-4 Forms. Colorado does not have an equivalent state form to the federal W-4. An employer should use the information from the federal W-4 Form to calculate the state wage withholding.
- Wage Withholding Tables (DR 1098) are changing for the 2013-2014 tax year. Please use the version on the Wage Withholding Forms Web page.
- 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.
Note: If you have paid wages to an employee you may be required to register with the Colorado Department of Labor and Employment (CDLE). CDLE manages the Unemployment Insurance program. Please visit the CDLE Unemployment Insurance Registration Web site for more details on requirements.