TAX NEWS - January 2010

Colorado: Wage Withholding Tax

If a business has employees in Colorado it must collect and remit wage withholding taxes from employees. Colorado's individual (personal) income tax rate is a flat 4.63% (tax rate may have been changed).

Colorado does not have an equivalent state form to the federal W-4. This is because the state income tax is based on the taxpayer's federal taxable income. An employer should use the information from the federal W-4 Form to calculate the state wage withholding amounts.
 

Wage Withholding Tables (DR 1098) Information

The Wage Withholding Tables are not changing for the 2010 year. Please use the current version listed on the Wage Withholding Forms Web page.


Winnings

Income tax is withheld from horse and dog racing winnings if the amount won is greater than $5,000 and at least 300 times the wagered amount. Income tax is withheld from slot machine and bingo winnings if the amount won is $1,200 or more and the customer does not provide proper identification. The amount withheld is 4% of the gross winnings and is reported to the customer on form W-2G or 1042-S.