DR 0233: Computation of Penalty Due Based on Underpayment of Colorado Estimated Tax for a Partnership and S Corporation (2025)
Colorado · Colorado DOR · Used for tax years 2025
Colorado Form DR 0233 calculates the penalty for underpayment of 2025 Colorado estimated tax by a partnership or S corporation. It determines whether an exception applies, calculates the required estimated tax payment, and should be included with the completed Form DR 0106.
Who files this form
DR 0233 computes the penalty for underpaying Colorado estimated tax for a partnership or S corporation.
For tax year 2025, a partnership or S corporation generally must make four quarterly estimated tax payments if its net Colorado tax liability exceeds $5,000, either with a composite nonresident return or because of a SALT Parity Act election.
The form says to include DR 0233 with your completed DR 0106.
When it's due
For tax year 2025, the quarterly payment due dates entered on line 10 are the 15th day of the fourth, sixth, ninth and twelfth months of the taxable year.
Partnerships and S corporations filing for a short tax year must adjust lines 9, 10 and 11 accordingly. The form does not print a separate filing deadline for DR 0233.
What you'll need
Have the following information ready:
- Your completed DR 0106, including the net tax on line 21.
- The partnership or S corporation name and Colorado account number.
- The previous year's Colorado tax liability, whether a Colorado return was filed, and whether that year was a 12-month tax year.
- Whether a SALT Parity Act election was made on the previous year's Colorado return, if you are making that election this year.
- Taxable income information for the three immediately preceding tax years to answer line 8.
- Estimated tax and withholding amounts, along with payment dates.
If income was not received evenly during the year, you may submit a statement with the return explaining the estimated payments and the cause of any underpayment.
How to file
Include DR 0233 with your completed DR 0106. The provided text does not give a mailing address or e-file instructions.
To complete the form:
- Complete Part 1 to check the $5,000 statutory exemption.
- Complete Part 2 to determine the required annual payment.
- Compute the penalty on lines 10 through 22 in Part 3. Complete each column before moving to the next.
- Add all amounts on lines 18 and 21 and enter the total on line 22. Include that amount as the estimated tax penalty on line 31 of DR 0106.
The form directs taxpayers to Tax.Colorado.gov for additional information.
Common mistakes
- Using the previous year's tax without checking eligibility. The preceding-year option generally requires a 12-month tax year, a filed Colorado return, and no taxable income of $1,000,000 or more in any of the three immediately preceding tax years.
- Missing the special SALT Parity Act instruction. If you are making the election but did not file a Colorado return making that election for the previous year, enter line 5's amount on both lines 6 and 7.
- Skipping the large-entity calculations. Large partnerships and large S corporations must complete line 11 using line 9. Any first-quarter underpayment caused by using the previous year's tax liability must be paid with the second quarterly payment.
- Not adjusting for a short tax year. Adjust lines 9, 10 and 11 as directed.
- Using an annualized income installment method. Colorado law does not allow partnerships or S corporations to use this method to compute estimated payments.
Questions people ask
How is the required annual payment calculated?
It is generally the smaller of 70% of actual net Colorado tax liability or 100% of the preceding year's Colorado tax liability. The preceding-year option is subject to the eligibility conditions in the form.
What makes an entity a large partnership or large S corporation?
Having taxable income of $1,000,000 or more in any of the three immediately preceding tax years. Such an entity may base its first quarterly estimated payment on 25% of the previous year's tax liability, but later payments must be based on the current year's actual tax liability.
What penalty rates does the 2025 form use?
Lines 18 and 21 use 12% for dates in 2025 and 11% for dates in 2026. The calculation also uses the underpayment amount and the applicable number of days.
Can an underpayment be excused for good cause?
Yes. No estimated tax penalty is due if the Department determines that the underpayment was due to good cause shown by the taxpayer. Entities that receive income unevenly during the year may submit a statement with their return explaining their estimated payments and the cause of any underpayment.