Colorado Gov. Jared Polis signed several updates regarding reporting requirements for business entities into law on June 1, 2023.
C Corporation Reporting
Effective for tax years beginning on or after January 1, 2024, every C corp subject to Colorado income tax must file its state income tax return by the 15th day of the fifth month following the close of the taxable year. For calendar-year taxpayers, this shall be May 15.
Previously, the original due date was the 15th day of the fourth month following the close of the taxable year, or April 15 for calendar-year taxpayers.
The Colorado Department of Revenue (DOR) may continue to grant extensions of time for filing returns.
Pass-Through Entity (PTE) Reporting
Effective for tax years beginning on or after January 1, 2024, new requirements apply to S corps and partnerships (together, “PTEs”) engaging in business in the state:
- PTEs must file a tax return reporting federal taxable income, state tax modifications required, and credits allowed under state income tax law. The return also must report each shareholder’s or partner’s share of the reported items and composite payment, if any such payment is made. The PTE must furnish each shareholder or partner a K-1 with a copy of the information reported to the Colorado DOR.
- Every PTE is required to file a composite return and make a composite tax payment on behalf of all nonresident shareholders or partners. Composite returns must not include:
- (1) Any resident or part-year resident shareholder or partner; (2) any nonresident shareholder or partner exempt from tax; (3) any nonresident shareholder or partner who timely files a nonresident filing agreement; or (4) any nonresident partner that is a corporation or a partnership
- PTEs electing to be taxed at the entity level
- Publicly traded partnerships
- PTEs consisting only of shareholders or partners to be excluded from a composite return
- The PTE’s composite filing will satisfy the filing obligation of nonresident individuals if their distributive share of income from the PTE is their only source of Colorado income. However, a nonresident individual may choose to file an individual income tax return in Colorado to claim their share of the composite payment made by the PTE.
- PTEs must electronically file and pay taxes due related to information reports, composite returns, and nonresident filing agreements. This will affect any filings and payments due on or after January 1, 2024.
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