A Step-by-Step Guide on How to File Your Colorado Tax Return for 2021

Filing your Colorado tax return for 2021 is an essential legal obligation for residents, part-year residents, and nonresidents with income sourced from the state. Individuals and small businesses in Colorado pay a flat income tax rate, and your state return closely aligns with your federal income tax return. Understanding the filing requirements, available credits, applicable forms, and deadlines ensures compliance while helping taxpayers avoid penalties or missed refund opportunities.

This guide is designed to assist individuals, families, and small business owners in completing their 2021 income tax returns for Colorado. It outlines who must file, explains recent changes affecting the tax year 2021, and provides step-by-step instructions for completing Form DR 0104 and any applicable schedules. Whether filing electronically through Revenue Online or by mail, taxpayers will find practical information to help them navigate the Colorado Department of Revenue’s process efficiently.

Who Needs to File a Colorado Tax Return for 2021

Filing a Colorado tax return for 2021 is mandatory for individuals who meet specific residency and income criteria. Whether you lived in Colorado for the entire year or earned income from the state while residing elsewhere, you may be required to file. This determination depends on your residency status, federal filing requirement, and whether you had any tax liability in Colorado during the tax year.

You must file a Colorado tax return for 2021 if you meet both of the following conditions:

1. You were one of the following:
   
   
   
   • A full-year Colorado resident
     
     
   • A part-year Colorado resident with taxable income during the period you lived in the state
     
     
   • A nonresident who earned income from Colorado sources
     
     
2. Additionally, one or both of the following conditions must apply:
   
   
   
   • You were required to file a federal income tax return for 2021
     
     
   • You had a tax obligation to Colorado for the year, even if you were not required to file federally.

Definition of a Colorado Resident

According to the Colorado Department of Revenue, a resident has established a permanent home in Colorado or intends to remain in the state permanently. The department may consider the following factors when evaluating residency:

• Colorado voter registration
  
  
• Colorado vehicle registration or driver's license
  
  
• Enrollment of yourself or your children in Colorado schools
  
  
• Ownership or lease of Colorado residential property
  
  
• The location of your spouse or dependents

If any of these indicators apply to you during the 2021 tax year, you are likely considered a resident for tax purposes. For more detailed guidance, visit the Colorado Department of Revenue residency page or review their individual income tax filing information.

What’s New for Colorado Taxes in 2021

Several key changes impacted Colorado tax returns for the 2021 tax year. The most notable change was the flat income tax rate reduction from 4.55% to 4.5%, which affects how much taxpayers owe on their Colorado-sourced income. This update applies to all residents and nonresidents required to file a tax return with the state.

Qualified families may have received the TABOR sales tax refund, which provided more money back to taxpayers due to excess state revenue. Additionally, the Low-Income Child Care Tax Credit was reinstated for eligible households, and the earned income tax credit remained available for low- and moderate-income earners who also filed a federal income tax return.

Colorado also introduced Form DR 0104EE, a new option allowing taxpayers to share information for health coverage enrollment when they file. Those using a tax preparer or choosing to file electronically through Revenue Online could access this form directly as part of the digital filing process.

Other noteworthy updates include expanded credits for retirees, such as an increased subtraction limit for military retirement benefits. Taxpayers seeking assistance or answers to tax-related questions could contact the Colorado Department of Revenue or consult licensed tax professionals.

Refer to your federal return and the IRS website for federal items like the child tax credit or updates from the Internal Revenue Service. Taxpayers should always retain copies of all forms, check their account status, and confirm payment records to ensure accurate and timely filing. For official instructions and updates, visit tax.colorado.gov.

Filing Deadlines and Extensions

Understanding Colorado’s filing deadlines is critical to avoiding late fees and interest on unpaid taxes. For the 2021 tax year, all taxpayers were expected to submit their tax return or request an extension by the standard due date. The state does not extend the time to make a required payment, even though it allows you to file whenever you choose. Meeting both deadlines is necessary to remain compliant and avoid additional charges to your tax account.

Original Filing Deadline

• Colorado's income tax deadline for the 2021 tax year was April 15, 2022.
  
  
• This deadline aligned with the IRS due date for filing a federal tax return.
  
  
• Any taxpayer who owes taxes must submit payment by this date, regardless of filing method.

Automatic Extension to File

• Colorado offers an automatic six-month extension to file state tax returns, moving the due date to October 15, 2022.
  
  
• This extension applies only to filing the return; it does not extend the payment deadline.
  
  
• If you expect to owe income tax, you must pay at least 90% of the tax due by the April deadline to avoid penalties or interest on your account.

Extension Payments

• If a taxpayer needed to make a payment with the extension, they were required to complete Form DR 0158-I.
  
  
• Taxpayers who used Revenue Online could submit their extension payment electronically and access a receipt for their records.
  
  
• Filing electronically also made it easier to track your form status and ensure that your tax documents were received.

Credit and Compliance Reminders

• Credits, such as earned income tax credits, must still be claimed on a properly filed return, even if you take an extension to file.
  
  
• The extension does not waive payment requirements or the obligation to follow state tax law.
  
  
• Taxpayers with questions or concerns about these rules can seek assistance from the Colorado Department of Revenue or a qualified tax professional.

Forms You’ll Need to File Your Colorado Return

Filing an accurate income tax return for Colorado for the 2021 tax year requires the correct forms and supporting schedules. Most taxpayers will use the standard individual income tax form. However, specific circumstances such as part-year residency, credits, or deductions will determine the required additional forms. Selecting the correct materials helps avoid errors, processing delays, or missed refund opportunities.

The primary forms for individual taxpayers include:

• Form DR 0104—The standard Colorado Individual Income Tax Return
  
  
• Form DR 0104CR—Used to claim any eligible income tax credit, such as child care or innovation credits
  
  
• Form DR 0104AD—For reporting subtractions from income, including military retirement or pension exclusions
  
  
• Form DR 0104PN—Required for part-year residents and nonresidents to allocate income correctly
  
  
• Form DR 0900—Used to submit payment by check or money order if you owe state taxes
  
  
• Form DR 0158-I—For submitting an extension filing payment if you cannot file by the original due date
  
  
• Form DR 0104EE—Allows you to share health coverage information with Connect for Health Colorado.

Taxpayers claiming the earned income tax credit must also complete the applicable federal schedules and include them with their state return. Your Colorado return must reference data from your IRS-filed federal return, so it is essential to prepare your federal documents first.

If you file using Revenue Online, many forms are built into the platform and completed through guided prompts. You can also create a tax account, verify what schedules apply to your situation, and upload required attachments before submission.

Always review the Colorado Department of Revenue’s official form instructions for the 2021 tax year to ensure you meet all requirements. Submitting a complete and accurate return helps avoid unnecessary audits or refund delays.

Step-by-Step Instructions to Complete Your Return

Filing your 2021 Colorado tax return requires accurate preparation of your federal and state tax documents. Whether you plan to file by mail or choose the convenience of e-filing through Revenue Online, carefully completing each step will help you avoid errors, penalties, and refund delays.

Before You Begin

Before working on your Colorado return, you must complete your federal return using IRS Form 1040 or 1040-SR. The information on your state return will depend on the federal adjusted gross income listed there.

You should gather the following documents before starting:

• You will need all W-2 forms from your employers to report your wages and income tax withheld during the year.
  
  
• Collect all 1099 forms showing income from other sources, including interest, dividends, and retirement distributions.
  
  
• Bring records of estimated tax payments you made to the state during 2021, as these will count toward your total payment.
  
  
• If you plan to claim any deductions or tax services (such as student loan interest, charitable contributions, or medical expenses), keep supporting documentation ready.
  
  
• Retrieve a copy of your previous year’s return for reference, which can help ensure consistency in your filing.
  
  
• Note: First-time filers, students, or those with lower incomes may qualify for free file programs offered through Colorado’s approved tax software partners.

Step 1 – Fill Out Form DR 0104

Begin with Form DR 0104, Colorado’s main individual income tax form.

• You should enter your full name, mailing address, Social Security number, and filing status as shown on your federal return.
  
  
• Transfer your federal adjusted gross income to the Colorado return in the income section.
  
  
• Add any required Colorado-specific additions, and subtract allowed deductions such as pension income or military retirement benefits.
  
  
• Use the 4.5% flat rate to calculate your base tax owed on your Colorado taxable income.
  
  
• Claim any state-specific credits, such as the income tax credit for child care or innovation programs, and include the earned income tax credit if applicable.
  
  
• Report the total payment already made, including tax withheld from W-2s or paid through estimated tax payments during the year.

Step 2 – Complete Additional Schedules

Depending on your residency status and filing situation, you may need to complete supplemental forms:

• Use Form DR 0104CR to report any eligible state credits, such as alternative fuel or enterprise zone credits.
  
  
• File Form DR 0104AD if you qualify for subtractions from income, such as retirement benefits, military pay, or tuition deductions.
  
  
• If you were a part-year resident or earned Colorado income as a nonresident, complete Form DR 0104PN to allocate earnings accurately.
  
  
• Use Form DR 0158-I only if you submit a payment with your extension request rather than a full return by the April deadline.

All completed schedules must be included with your return, whether you file by mail or electronically through Revenue Online.

Step 3 – Review and Double-Check

Before you submit your return, take time to verify the following:

• Double-check all math calculations, personal details, and Social Security numbers to reduce the risk of errors or processing delays.
  
  
• Ensure that your return includes all necessary forms and supporting documents.
  
  
• Make sure you have signed and dated your return. Unsigned returns may be rejected or delayed.
  
  
• Decide whether to mail your return or e-file it through Colorado’s Revenue Online system. Electronic filing is faster and provides instant confirmation.
  
  
• Taxpayers using the free e-filing system or a tax professional should retain copies of all submitted materials for their records.

By completing each step carefully and submitting your return on time, you can stay compliant with Colorado tax requirements and avoid unnecessary corrections or follow-up from the Department of Revenue.

How to File Your Return

Colorado taxpayers can file their 2021 return electronically or by mail, depending on preference and filing needs. Due to its speed and accuracy, electronic filing is the recommended option for most individuals and small business owners.

E-File Through Revenue Online

The state’s official platform, Revenue Online, allows you to submit your return securely, check filing status, and receive immediate confirmation. You can upload supporting documents, track refund progress, and manage your tax account in one place. E-filing also reduces processing time compared to paper returns.

Paper Filing by Mail

If you choose to mail your return, be sure to send it to the correct address based on your payment status. Colorado provides different mailing addresses for returns with payments, without payments, or showing a zero balance. Include all required forms, schedules, and documentation. Use first-class mail and apply the correct postage.

Regardless of method, double-check that all information is accurate and that your return is signed. Incomplete or unsigned filings can result in delays or rejections. Keep copies of all documents submitted and track your submission status to ensure your return is processed correctly.

How to Make a Payment to the Colorado Department of Revenue

If you owe Colorado state taxes for the 2021 tax year, you must submit your payment by the original April 15, 2022, deadline to avoid interest and penalties. Colorado provides both electronic and paper-based payment options to meet different taxpayer needs.

1. Online Payment Through Revenue Online

• Taxpayers can pay securely through Revenue Online using a direct bank transfer (EFT), credit card, debit card, or e-check.
  
  
• You can schedule your payment in advance and receive a confirmation for your records.
  
  
• Online payments are generally processed faster, allowing you to manage your tax account more efficiently.

Payment by Mail

• If paying by check or money order, complete Form DR 0900 and include it with your payment.
  
  
• Make your check payable to “Colorado Department of Revenue,” and write your Social Security number and “2021” in the memo line.
  
  
• Mail your payment to the appropriate address listed in the form instructions and use first-class postage for timely delivery.

Best Practices

• Double-check your payment amount before submission.
  
  
• Keep copies of both your completed form and payment confirmation for future reference.
  
  
• Timely payment ensures compliance with Colorado tax requirements and prevents unnecessary penalties.

Tracking Your Refund or Balance Due

After filing your Colorado return, you can track the status of your refund or verify any balance due using the Department of Revenue’s secure online tools. These services help you stay informed about the progress of your return and allow you to respond quickly if any issues arise.

Checking Your Refund Status

• Taxpayers can use the “Where’s My Refund?” feature on Revenue Online to check the status of their state refund.
  
  
• E-filed returns are typically processed within three to five weeks, while paper returns may take up to 12 weeks.
  
  
• You will need your Social Security number and amount to access your refund information.

Verifying a Balance Due

• You can log in to your tax account to confirm the balance, review recent payments, or print a statement if you owe taxes.
  
  
• Remember that interest begins accruing on any unpaid balance after the April deadline, even if an extension was filed.

Taxpayers who claim the earned income tax credit or other credits may experience additional processing time, especially if income or identity verification is required. For federal refund inquiries, contact the IRS or use their free online tracking tool.

Final Filing Checklist

Reviewing your documents carefully before submitting your 2021 Colorado tax return is essential. A complete and accurate return helps avoid delays, penalties, or follow-up notices from the Department of Revenue. Use the checklist below to ensure everything is in order.

• Confirm that your Colorado tax return is fully completed, signed, and dated. Unsigned or incomplete forms may be rejected.
  
  
• Attach all required W-2s, 1099s, and other income documentation. These must match the amounts reported on your return.
  
  
• Include any supporting schedules, such as Form DR 0104CR for credits, DR 0104AD for subtractions, or DR 0104PN if you were a part-year resident or nonresident.
  
  
• Verify that your personal information, including your Social Security number and mailing address, is accurate and current.
  
  
• Double-check all calculations to reduce the chance of math errors or incorrect totals.
  
  
• Confirm that your direct deposit information is correct if you expect a refund.
  
  
• Keep a complete copy of your return and supporting materials for your records. Colorado recommends retaining tax documents for at least three years.

Completing this checklist before submission helps ensure a smooth and timely filing process.

Frequently Asked Questions

What if I missed the April 15 deadline?

If you missed the April 15, 2022, deadline, file your return as soon as possible to reduce penalties and interest. Colorado grants an automatic six-month extension to file, but not to pay. If you owe taxes, interest began accruing after April 15, regardless of whether you filed an extension.

Can I e-file my return for free?

Colorado offers free e-filing options through its Revenue Online system and approved third-party providers. Eligibility for free services may depend on your income, filing status, or age. Visit the Colorado Department of Revenue’s website for a list of authorized software providers and details about the state’s Free File program.

What deductions or subtractions are most commonly missed?

Commonly missed deductions include the military retirement subtraction, pension income exclusion for seniors, and contributions to Colorado 529 college savings plans. Taxpayers also often overlook refundable credits like the earned income tax credit or the child care expenses credit. Always review the DR 0104AD and DR 0104CR schedules before filing.

How do I request an extension to file?

Colorado provides an automatic six-month extension to file, so you do not need to submit a request form. However, you must pay at least 90% of your estimated tax liability by April 15 to avoid penalties if you owe taxes. Use Form DR 0158-I if sending a payment with your extension.

Can I file jointly if I moved in or out of Colorado mid-year?

Yes, you can generally file jointly for Colorado if you also filed jointly on your federal return. If you or your spouse were only part-year residents, you must use Form DR 0104PN to allocate income. Each spouse’s income must be reported accurately based on their period of Colorado residency.

What happens if I don’t file a return at all?

If you fail to file a return and the Department of Revenue believes one is required, it may issue a return on your behalf based on available information. This estimate may exclude deductions or credits you’re entitled to, which could increase your liability. Filing voluntarily avoids unnecessary penalties and audit risk.

How do I fix an error on my return after I’ve filed?

To correct an error, file an amended return using Form DR 0104X. You can e-file amended returns for 2021 through Revenue Online. Include corrected amounts, supporting documentation, and a clear explanation of the change. Amended returns may take additional time, especially if you claim a refund adjustment.