Life often unfolds unexpectedly. A sudden job loss, a medical emergency, or an unexpected expense can throw even the most responsible taxpayer off track. You're not alone if you're behind on your state taxes and unable to pay the full balance to the Colorado Department of Revenue.
What's the good news? Colorado offers a way to catch up without sinking further into financial stress. Through what’s known as a tax payment plan or installment agreement, you can pay off your back taxes gradually in monthly installments that match your budget. Whether you’re dealing with a recent tax bill or a debt hanging over your head for a while, this option can help you avoid aggressive collection actions like wage garnishment, property liens, or bank account levies.
Getting started isn’t as complicated as it might seem. You can apply through Colorado’s Revenue Online portal or talk directly with someone in the Collections Section. This guide will walk you through the process, covering everything from who qualifies to what to do if things go wrong. If you’re feeling overwhelmed by your tax situation, don’t worry. You’ve got options, and this breakdown is here to help you move forward confidently.
A tax payment plan in Colorado lets you pay your state tax debt over time, rather than all at once. It’s designed for people and businesses who’ve received a tax bill from the Colorado Department of Revenue (CO DOR) but can’t afford to pay it in full by the due date. Instead of risking collection actions, you can spread your balance through structured monthly payments that better fit your budget.
These plans can be used to settle various tax types, including personal income tax and business-related taxes. To stay in good standing, you’ll need to make your full payments on time every month and stay current with all future tax filings. While Colorado doesn’t charge a setup fee for these plans, remember that interest and penalties will still accrue until the full balance is paid. If you're owed a state refund, Colorado may automatically apply it to your outstanding balance to help pay it down faster.
The minimum monthly payment depends on how much you owe and the agreement's time frame. When ready, log into your Revenue Online account or contact the Collections Section to initiate a plan request. It’s a straightforward way to manage your tax debt responsibly, avoid being sent to a third-party collection agency, and regain financial control one step at a time.
To assist taxpayers in paying off their outstanding tax debt, the Colorado Department of Revenue provides short-term and long-term installment agreements. Colorado’s payment plans are designed to meet people where they are financially, whether you’re a business owner dealing with past-due sales tax or an individual trying to catch up on personal income taxes. How much you owe, what your finances look like, and how much you can reasonably pay each month will all factor into what kind of plan you qualify for and how long it’ll last.
Both plan types require you to meet the Colorado Department’s minimum monthly payment and remain current on all subsequent tax filings.
No matter which plan you choose, following the terms exactly is imperative. If you fall behind on payments or forget to file new returns, the state may issue a warning, and in some cases, it’ll send your case to a collection agency. By selecting the appropriate plan and maintaining compliance, you can resolve your tax situation and responsibly safeguard your finances.
To qualify for a Colorado tax plan, you must meet specific requirements established by the Colorado Department of Revenue.
If your tax bill is too small, you must pay it in full rather than use an installment plan.
Eligibility for taxpayers with business tax debt is often more complex than for individuals and usually requires review by a compliance agent. If you've previously defaulted or owe a significant balance, you may be asked to submit supporting financial documents before a payment plan can be approved.
To keep your Colorado tax payment plan active and avoid collection actions or a final notice:
Whether you are an individual or a business taxpayer, how you apply for a tax payment plan in Colorado determines how you will pay. Depending on your tax situation, balance, and tax type, the Colorado Department of Revenue offers several application methods. Regardless of how you apply, you must submit supporting documents, including your tax bill, financial information, and any required forms.
You may apply online or by phone:
Business taxpayers must apply by phone.
After your phone call, you’ll receive agreement documents by mail. Once you sign and return them, your payment plan begins.
Colorado may offer modified payment terms if you're struggling financially and cannot meet the terms of your current plan.
Submit Form DR 6596 (Statement of Economic Hardship) to request hardship consideration formally. Both individuals and businesses may qualify.
You must continue making regular payments while your request is reviewed. Failure to do so may void your existing agreement.
There are serious consequences for defaulting on a tax payment plan in Colorado.
Your tax payment plan in Colorado is considered in default if you don’t meet the agreement's essential terms. This can happen in the following situations:
Once your payment plan is officially in default, the Colorado Department of Revenue may take the following actions:
You’ll usually receive a final notice from the Colorado Department of Revenue warning you that your tax payment plan is at risk. If you don’t act quickly, the state may pursue more aggressive collection efforts to recover the balance owed. These actions may include
Yes, you may be able to reinstate a canceled tax payment plan in Colorado, but it’s essential to act quickly and take the proper steps:
Review your eligibility and gather the necessary documents before applying for a tax payment plan in Colorado. Submitting a complete and accurate request increases your chances of approval and helps avoid unnecessary delays. Here's what you need to do before starting your application:
To qualify for an installment agreement with the Colorado Department of Revenue, you must meet specific criteria:
If you meet all these criteria, you can request a payment plan that fits your financial circumstances.
Before beginning your application, be sure to collect all of your personal and tax account details. This includes your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), your most recent tax bill or notice, and your contact information, such as your phone number, mailing address, and email. If you plan to apply online, you must create or log in to a Revenue Online account. You should be prepared to supply your bank account information to set up automatic payments.
Please carefully review your finances before proposing a monthly payment amount. You’ll need to know all household income sources, including wages, Social Security, and pension income. List your fixed monthly expenses—rent or mortgage payments, utilities, transportation costs, and insurance. Don’t forget to include any unusual or necessary expenses like medical bills or dependent care. Proposing a payment you can afford is essential; overcommitting could result in default, penalties, or being referred to collections.
You must submit proof of your hardship if you're struggling financially and need a modified installment agreement. This includes a completed Form DR 6596 (Statement of Economic Hardship), your most recent pay stubs, 30 to 60 days’ worth of bank statements, and documents showing significant obligations like child support, medical bills, or student loans. If you feel it’s helpful, include a brief letter explaining your financial situation. You should keep up your current plan's regular payments while your request is reviewed to prevent cancellation.
Before submitting your application, double-check that you’ve reviewed your tax balance through Revenue Online or on the mailed bill. Make sure the payment plan you’ve selected meets the Department’s minimum requirements and that you understand interest and penalties will continue to accrue until the full amount is paid. Once your plan is approved, please return any signed agreement documents at your earliest convenience. You should know how to reach the Collections Section or your assigned compliance agent if you run into questions. Lastly, ensure all your state tax returns have been filed through the current tax year.
If you need help navigating your options, consider the following:
You can request a tax payment plan for Colorado the day after the annual tax deadline, typically around April 15. Once the Colorado Department of Revenue sends your tax bill, you may apply through Revenue Online or by calling the Collections Section. Don’t wait too long—getting a payment plan early can help reduce stress, avoid penalties, and give you more manageable monthly payments for your outstanding tax debt.
The Colorado Department of Revenue determines your minimum monthly payment based on your total tax debt and how long you need to pay it off. All payment plans must include at least three monthly payments. You might need to pay in full if your tax bill is small. Your proposed amount must be realistic and approved by the department to keep your tax payment plan active and avoid default.
If you've enrolled in a tax payment plan in Colorado, the state may automatically apply future tax refunds to lower your outstanding balance. This helps pay off your tax debt faster but doesn’t replace your required monthly payments. You must continue making timely payments, even if your refund is applied. This process ensures the Colorado Department of Revenue collects unpaid taxes efficiently while keeping your plan active.
Missing a monthly payment or failing to file new tax returns on time may result in defaulting on your tax payment plan in Colorado. If this happens, the Colorado Department of Revenue can cancel your agreement and demand full payment, which may involve using wage garnishment or property liens. To avoid these actions, always follow your plan’s terms, file future returns promptly, and contact the Collections Section if financial problems threaten your ability to pay.
If your financial situation changes and you can’t keep up with your monthly payments, you may request modified terms. To adjust your tax payment plan in Colorado, file Form DR 6596 and provide proof of financial hardship, such as pay stubs or bank statements. A compliance agent will review your case. Continue making your current payments during the review to avoid default. Modified plans can help reduce financial pressure.
Businesses with Colorado tax debt must contact a compliance agent directly at the Department of Revenue. Call (303) 866-3711 to discuss your balance and financial status and set up a tax payment plan that fits your business’s needs. Business taxpayers cannot use Revenue Online to apply. After approval, you’ll receive documents to sign and return. Compliance with business tax filings and payments helps avoid collections and enforcement actions.
If your payment coupons suddenly stop arriving, it could mean your tax payment plan for Colorado has been canceled. This may happen due to missed payments, failure to file new tax returns, or unreturned agreement documents. Please contact the Collections Section promptly to verify the status of your plan. You can often reinstate your plan or reapply if your tax situation qualifies. Acting quickly helps avoid additional penalties or collections.
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