Money from the State Education Fund is required to be spent on “accountable education reform, for accountable programs to meet state academic standards, for class size reduction, for expanding technology education, for improving student safety, for expanding the availability of preschool through kindergarten programs, for performance incentives for teachers, for accountability reporting, or for public school building capital construction.” 18 The remaining revenue from income tax is credited to the General Fund for spending on general operations. This equates to about 7 percent of income tax revenue from both individual and corporate income taxes. One-third of one percent of state taxable income is credited to the State Education Fund pursuant to the requirements of Amendment 23. The Department of Revenue publishes information on income tax expenditures, including subtractions, deductions, and credits, in its biennial Tax Profile and Expenditure Report. Colorado income tax credits are then subtracted from this amount to arrive at the net Colorado income tax (the amount paid by a Colorado taxpayer). To calculate the Colorado income tax, a “flat” tax rate of 4.55 percent is applied to federal taxable income after adjusting for state additions and subtractions, the largest and most common of which are listed below. Policy that changes federal taxable income will also change Colorado taxable income. Taxpayers can consult the Department of Revenue’s filing guide for instructions to complete Colorado Individual Income Tax Form 104.Ī taxpayer’s Colorado income tax liability is calculated as follows:įederal taxable income serves as the base for Colorado income tax. These forms allow taxpayers to calculate and report how much income tax has already been paid to the state of Colorado through withholding and estimated payments and how much is still due for a given tax year. Higher income earners may be required to pay the alternative minimum tax (AMT) in addition to the income tax.Ĭolorado individual income tax returns (Form 104 and any tax payment owed) for a calendar year are due to the Department of Revenue on or before the following April 15th unless an extension is granted. Estimated tax is used to pay the alternative minimum tax and self-employment tax. These payments are filed quarterly or annually depending on the type and source of income earned. Withheld taxes are submitted by employers to the Colorado Department of Revenue.Įstimated payments include income for self-employed individuals, as well as income from dividends, interest, capital gains, rent, and royalties. For wages and salaries, the amount withheld is determined using Colorado form DR 1098. Compensation for employment and earnings from certain other income sources (including pensions, bonuses, commissions, and gambling winnings) are withheld from the employee’s paycheck by his or her employer. Individuals and some businesses pay individual income taxes through withholding or through estimated payments.
If the nonresident individual is going to be taxed at a higher rate than their financial circumstances would require if they filed individually, the individual can file a nonresident return (Form NJ-1040NR).įor more information, see the instructions for the New Jersey Composite Return (Form NJ-1080C) or the New Jersey Nonresident Return (Form NJ-1040NR).Source: Colorado Revised Statutes and Legislative Council Staff. Participation in a composite return is elective. Note: For Tax Year 2017, the highest tax rate was 8.97%. Therefore, the composite return, Form NJ-1080C, uses the highest tax bracket of 10.75%. Since a composite return is a combination of various individuals, various rates cannot be assessed. New Jersey has a graduated Income Tax rate, which means it imposes a higher tax rate the higher the income. Technically, it is an individual return that each nonresident income earner must file, except that it is a composite filing of all the individual returns on one form. Tax Rate for Nonresident Composite Return (Form NJ-1080C)Ī composite return is a group filing. Use the correct schedule for your filing status. You must use the New Jersey Tax Rate Schedules if your New Jersey taxable income is $100,000 or more.
Tax Rate Schedules (2017 and Prior Returns) Tax Rate Schedules (2020 and After Returns) When using the tax table, use the correct column. If your New Jersey taxable income is less than $100,000, you can use the New Jersey Tax Table or New Jersey Rate Schedules. NJ Income Tax – Tax Rates Gross Income Tax
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