A Colorado partnership or S corporation that has made the SALT Parity Act election must make quarterly Colorado PTE estimated tax payments when its net Colorado tax liability for the year will exceed $5,000. Payments are due April 15, June 15, September 15, and January 15 of the following year for calendar-year filers, submitted through Revenue Online or by mail with Form DR 0106EP.1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act Miss the threshold and you can pay everything with the annual return; exceed it and skip an installment, and Colorado charges interest at rates as high as 11% annually.2Colorado Department of Revenue. Tax Topics: Penalties and Interest
The $5,000 Threshold and the Quarterly Schedule
An electing pass-through entity owes quarterly estimated payments only if its net Colorado tax liability for the year exceeds $5,000.1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act Below that, you can pay the whole amount when you file the annual return. Above it, you owe four installments.
Calendar-year entities pay on these dates:
- First quarter: April 15
- Second quarter: June 15
- Third quarter: September 15
- Fourth quarter: January 15 of the following year
When a due date lands on a Saturday, Sunday, or legal holiday, it moves to the next business day.3Colorado Department of Revenue – Taxation. Individual Income Tax – Estimated Payments Fiscal-year filers follow the same pattern mapped onto their accounting period: the 15th day of the 4th, 6th, and 9th months of the fiscal year, then the 1st month of the following year.4Cornell Law Institute. Colorado Code 39-22-605 – Estimated Individual Income Tax
At least 90% of the full year’s tax must be paid by the original due date of the annual return to avoid the late payment penalty.5Department of Revenue – Taxation. Partnership and S Corporation Filing Information An extension gives more time to file Form DR 0106, not more time to pay.
Calculating Each Installment
The entity-level tax equals Colorado taxable income multiplied by the applicable income tax rate. That rate has been 4.40% in recent years, though Colorado can drop it to 4.25% retroactively if revenue targets are hit.6Department of Revenue – Taxation. Individual Income Tax – Frequently Asked Questions For 2026 estimated payments, use 4.40% and adjust if a reduction is announced.
Colorado taxable income at the entity level is the sum of each member’s share of the entity’s income, gains, losses, and deductions. Resident members contribute their entire distributive share. Nonresident members contribute only Colorado-source income. A member whose net income from the entity is negative is excluded from the calculation entirely, not netted against the other members.7Colorado Department of Revenue. Income Tax Topics: SALT Parity Act
An example. An entity projecting $200,000 of Colorado taxable income at 4.40% expects $8,800 in tax. That clears the $5,000 threshold, so four installments are due. Divided evenly, each is $2,200. Recalculate before each due date: if revenue runs higher or lower than projected, the remaining installments should reflect the updated number.
Making the Payment
Revenue Online is the fastest option. Log in, select the estimated payment option for pass-through entities, and pay by electronic funds transfer from a verified business bank account. The system returns an immediate confirmation number.8Department of Revenue – Taxation. Business Income Tax – Estimated Payments
To pay by mail, complete Form DR 0106EP (the Partnership and S Corporation Estimated Income Tax Payment form) and send it with a check payable to the Colorado Department of Revenue to:9Colorado Department of Revenue. Colorado Partnership and S Corporation Estimated Income Tax
Colorado Department of Revenue
Denver, CO 80261-0008
The correct form number is DR 0106EP, not DR 0106P. The form asks for the entity name, address, federal employer identification number, tax year, and payment amount. The FEIN is the field to double-check; a wrong number means the payment won’t post to your account. Certified mail creates a delivery record if a deadline is ever contested. After mailing, log into Revenue Online within a few business days to verify the payment posted.
What Underpayment Costs
Colorado charges interest on unpaid balances from the original due date until the tax is paid. For 2026, the discounted rate is 8% and the regular rate is 11%. The discounted rate applies if you pay before receiving a notice of deficiency or within 30 days of receiving one; after that, the 11% rate applies. Interest accrues daily and doesn’t cap, even under a payment plan.2Colorado Department of Revenue. Tax Topics: Penalties and Interest
The late payment penalty is separate. For income tax, it’s the greater of $5 or a percentage of the unpaid tax equal to 5% plus an additional 0.5% for each month or partial month the tax stays unpaid, capped at 12%.2Colorado Department of Revenue. Tax Topics: Penalties and Interest
The estimated tax underpayment penalty operates on a per-installment basis. Interest is applied to each quarter’s shortfall, running from that installment’s due date until the earlier of the annual return due date or the date the shortfall is actually paid.10Justia Law. Colorado Revised Statutes Title 39 Section 39-22-605 – Failure by Individual to Pay Estimated Income Tax Missing an April installment costs more than missing a September one, because the meter runs longer.
The Election Has to Be in Place First
Estimated payments assume an election has been made. The PTE election is annual and irrevocable once made for the tax year, binding all partners or shareholders except C corporation partners that are unitary with the partnership.1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act
The election can be made two ways: by checking the applicable box on Form DR 0106 when filing the annual return, or in advance by filing Form DR 1705, the SALT Parity Act Election Form.11Department of Revenue – Taxation. DR 1705 – SALT Parity Act Election Form If you plan to make estimated payments during the year, file DR 1705 before the first installment date rather than waiting until the return is filed.
Only S corporations and partnerships (including general partnerships, limited partnerships, and limited liability partnerships) qualify. Sole proprietorships and single-member LLCs disregarded for federal tax purposes do not.12Justia Law. Colorado Revised Statutes Title 39 Section 39-22-343 – Election
How Payments Flow Through to Members
Every dollar the entity pays generates a dollar-for-dollar credit on the individual Colorado return of each member, allocated by share. The entity reports each member’s credit amount on the Colorado K-1 (Form DR 0106K).1Department of Revenue – Taxation. Income Tax Topics: SALT Parity Act
If a member’s credit exceeds their Colorado individual income tax liability, the excess is refunded. The credit is only allowed if the entity has actually remitted the tax and provided sufficient identifying information on its return; a K-1 alone won’t produce the credit if the entity never paid.7Colorado Department of Revenue. Income Tax Topics: SALT Parity Act That’s the practical reason to keep the quarterly schedule accurate: members counting on the credit are counting on the entity’s payment history matching what appears on their K-1s.