Colorado Payroll Tax and Registration Guide

Employers in the Centennial State, here’s what you need to know about payroll taxes and business registration in Colorado. Business registration and payroll taxes can be complicated. In order to get the best advice you can, enlist the help of a lawyer or a Certified Public Accountant in the State of Colorado to guide you through the process.

Whether you’re a brand new small business or branching out into Colorado for the first time, here’s how to stay compliant with payroll tax and business registration laws in the state.

Colorado tax account registration information

Before you can operate a business in Colorado, you’ll have to register your business with the state. This is the first step to eventually being able to pay unemployment and payroll taxes in Colorado. To register a new business, follow the steps in the checklist provided by the Colorado Secretary of State:

• File a unique entity name and a trade name if you plan on using one.
• Register your business online.
• Maintain an up-to-date record with the Colorado Secretary of State’s Office. This may include filing an annual report.

Once your business is formed and registered in the State of Colorado, next you’ll have to set up a tax account with the Colorado Department of Revenue. This is done online at mybiz.colorado.gov or by filing a Colorado Sales Tax and Withholding Account Application, Form CR 0100.

Required payroll documentation for Colorado

Colorado’s Department of Revenue publishes a withholding tax guide. This can help businesses navigate the process of payroll withholding and documentation in the State of Colorado.

Withholding information

Every employer in Colorado is governed by the state’s wage withholding laws. Specific requirements vary by business. In general, if federal wage withholding is required, so is withholding in Colorado. Wages that are exempt from federal withholding rules are generally exempt from Colorado withholding laws as well.

The Colorado Withholding Worksheet for Employers (Form DR 1098) is designed to help employers determine what they need to withhold for each employee. Depending on your business’s total annual withholding liability, you’ll have to file wage tax returns on a quarterly, monthly, or weekly basis.

Power of Attorney rules for Colorado Payroll Tax and Registration

Colorado has power of attorney laws that allow payroll providers, individuals or organizations, to deposit state taxes and file returns on behalf of their clients. To do this, fill out and submit Form DR 0145 with the Colorado Department of Revenue.

Local income taxes imposed for Colorado

As of 2022, Colorado’s income tax rate is 4.40%.

Colorado resources for Payroll Tax and Registration Laws

Colorado’s Department of Revenue is the state department that you’ll be working with for payroll tax, income tax withholding, and business registration regulations in the State of Colorado. If you have questions about payroll taxes or business registrations in Colorado, connect with this departments to get the guidance you need.

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