Article: 50681
What Is This Screen?
The CO – Underpayment Penalty screen is used to calculate or override the Colorado underpayment penalty (Form CO-204) when estimated payments or withholding are less than the required annual payment.
In most cases, the penalty is calculated automatically. However, you can use this screen to claim an exception, apply the annualized installment method, or override how the penalty is figured.
When to Use This Screen
You may need to complete this screen if:
- You want to force the CO-204 form to print, even when no penalty is due
- You want to suppress the automatic penalty calculation
- You qualify for an exception to the underpayment penalty
- You want to calculate the penalty using the annualized installment method
- Your income was not evenly distributed throughout the year
- You had a large tax refund from prior-year credits
Information You’ll Need to Enter
Part 1 – Exceptions
- Whether at least 2/3 of your gross income is from farming (Exception No. 1)
- Whether you meet Colorado’s Exception No. 2 for full-year residency and zero sales tax refund
Part 2 – Required Annual Payment
- Total Colorado tax liability (after credits, excluding withholding and estimates)
- Whether your federal AGI exceeds $150,000 ($75,000 if MFS)
- Date you plan to file your return (used for interest calculation)
Part 4 – Annualized Installment Method
Taxable income amounts through:
- 03/31/2024
- 05/31/2024
- 08/31/2024
Optional: Special withholding overrides for Q1–Q4
How to Add the CO – Underpayment Penalty Screen
- Go to the State Taxes section on the left-hand side.
- Click I’d like to see the forms I’ve filled out or search for a form.
- Select Colorado from the dropdown menu.
- Click the Other tab.
- Choose CO – Underpayment Penalty.
- Complete the applicable sections based on your situation.
- Click Save when done.