Business Income Tax | Organizational Structure

C Corporations

A C corporation must file a C Corporation Income Tax Return (DR 0112) for any year it is doing business in Colorado. If a C corporation is eligible for a credit, it would file a DR 0112CR. For affiliated groups of C corporations, visit the Affiliated Corporations web page for information on how to file a return.

S Corporations

An S corporation must file a Partnership and S Corporation Income Tax Return (DR 0106) for any year it is doing business in Colorado. An S corporation is a corporation for which a valid election is in effect under section 1363(a) of the Internal Revenue Code. If a corporation is an S corporation for federal income tax purposes it is an S corporation for Colorado income tax purposes. S corporations are not subject to Colorado income tax. However, an S corporation can file a composite return on behalf of their partner/shareholders OR they can pass the liability through to the partner/shareholders who report the income on their personal returns.

Partnerships 

A partnership must file a Partnership and S Corporation Income Tax Return (DR 0106) for any year it is doing business in Colorado. If a partnership is eligible for a credit, it would file a DR 0106CR (which can be found in the DR 0106 Booklet).

Limited Liability Companies (LLC)

A Limited Liability Company (LLC) is a business organizational structure that is allowed in Colorado. The Department will generally treat the income from your LLC in the same way as indicated on your federal income tax return. Review the LLC classification criteria on the Internal Revenue Service (IRS) website for more information.