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January 4, 2017
2017-0007

Colorado DOR releases 2017-2018 withholding tax guide — Forms W-2 filing reminders

The Colorado Department of Revenue released a revised Publication DR 1098, Colorado Income Tax Withholding Tables for Employers, for calendar years 2017-2018. The Colorado income tax rate of 4.63% has not changed for calendar year 2017; but the wage-bracket withholding tables and percentage method tables have been updated to accommodate changes to the federal standard deduction and exemption amounts since the last update. See page 2 of this alert for the annual percentage method tables.

Annual percentage method tables are included in the Attachment.

Supplemental withholding rate for bonuses and overtime

An employer that pays an employee overtime or a bonus on a separate check rather than as part of his/her regular payroll check must withhold Colorado tax. The employer may withhold 4.63% in lieu of using the withholding tax tables in Publication DR 1098.

Department to match federal Form W-2 deadline for calendar year 2016 Forms W-2, due January 31, 2017

The Department will follow the new federal deadline of January 31 for filing Forms W-2 (and 1099 with Colorado withholding or nonemployee compensation shown in box 7) beginning with calendar year 2016, accelerating the deadline from February 28 for paper forms and March 31 for forms filed electronically. As a result, calendar year 2016 Forms W-2/1099 must be submitted by January 31, 2017.

Employers filing 250 or more Forms W-2/1099 are required to file electronically over the Department's Revenue Online system. Employers filing less than 250 Forms W-2/1099 may elect to file electronically or submit paper copies along with Form 1093, Annual Transmittal of State W-2 Forms, (Form DR 1106, Annual Transmittal of State 1099 Forms, is sent with paper Forms 1099 that show Colorado withholding or 1099-MISC with nonemployee compensation). Employers filing Forms W-2 electronically need only complete Form 1093 if paying additional withholding tax or requesting a refund — otherwise no transmittal is needed.

Specifications for filing Forms W-2 electronically can be found here. More information can be found here.

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Contact Information
For additional information concerning this Alert, please contact:
 
Employment Tax Services Group
• Debera Salam(713) 750-1591

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Other Contacts
Employment Tax Services Group
• Gregory Carver(214) 969-8377
• Richard Ferrari(212) 773-5714
• Kenneth Hausser(732) 516-4558
• Kristie Lowery(704) 331-1884
• Christina Peters(614) 232-7112
• Debbie Spyker(720) 931-4321

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ATTACHMENT

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