Tax Professionals Update 2008

Tax Professionals Update 2008 Colorado Department of Revenue Taxpayer Service Division Public Information & Education Agenda • • • • • • • • Introduction Additions Subtractions/Credits 2008 Legislation – Income/Sales Tax Helpful Hints – Avoid Delays Miscellaneous Resources/Online Services Questions? Colorado Department of Revenue Slide 2 August 2008 Introduction  Class Time  Breaks  Food and Beverage  Rest Rooms  Cell Phones  Questions  Handouts and Forms August 2008 Colorado Department of Revenue Slide 3 Additions • Municipal Bond Interest • Income Tax Deduction Addback • Unearned Income for a Minor Child • Charitable Contribution Deduction Addback Municipal Bond Interest • State and local municipal bond interest is exempt from federal tax and therefore is not included in federal taxable income reported on line 1 of the Colorado income tax return. However, this income is taxable in Colorado if it is from sources outside of Colorado or from certain older Colorado municipal bonds. This interest must be added to taxable income on the Colorado return in the "Additions to Federal Taxable Income" section of Form 104. C.R.S. 39-22-104(3)(b). • The net amount of state and municipal bond interest to be added to taxable income is the gross amount of the interest reduced by any bond premium amortization applicable to that income and any expenses required to be allocated to that income by the Internal Revenue Code. • FYI Income 52 “Addition To Income For Non-Colorado State and Local Bond Interest” August 2008 Colorado Department of Revenue Slide 5 Income Tax Deduction Addback • Individuals who itemize deductions on their federal returns, must add back on the Colorado return any state income tax included in their federal deductions. Enter this modification on line 2 on the Colorado Individual Income Tax Return (Form 104). Estates and trusts must also add back this deduction on Form 105. C.R.S. 39-22-104(3)(d). • If you do not itemize deductions on your federal income tax return, you will not be required to add back your state income tax on your Colorado return. • If you do itemize deductions on your federal income tax return but deduct general sales taxes on line 5, Schedule A, Form 1040, you do not add back your taxes on your Colorado return. August 2008 Colorado Department of Revenue Slide 6 Income Tax Deduction Addback cont. Q. Should the state income tax deduction addback include the local tax portion of the state and local taxes deducted on federal form Schedule A? – There are no local income taxes in Colorado. The amounts often reported on Colorado W-2 forms as local income taxes for cities such as Denver, Aurora and Greenwood Village are actually occupational taxes charged at a flat rate by those cities for the privilege of working in that city. – Local income taxes are collected in a few states. These taxes would not be included in the state income tax deduction addback because only "state taxes" must be included in the addback. • FYI Income 4 “State Income Tax Deduction Addback” August 2008 Colorado Department of Revenue Slide 7 Unearned Income for a Minor Child • Parents of children with gross unearned income greater than $900 but less than $9,000 can report their child’s income on their federal income tax return, by attaching Form 8814. Form 8814 is for children under 18 who received unearned income consisting of interest/dividends. • When Form 8814 is used, the child’s unearned income greater than $900 and less than $1,800 is not included in the parents’ federal taxable income - it is not subject to the parents’ marginal tax rate. • Include the missing income on the ―other additions‖ line of the Colorado 104 Form. – First $900 income - exempt from state/federal taxation – Next $900 income - taxed by IRS at 10%. Not included in federal taxable income - therefore must be entered on line 3 of Colorado return. – Next $7,200 of income (from $1,800 to $9,000) - reported on line 21 of federal form 1040 and consequently included in federal taxable income on both federal/state return. – Looking for a way to report the first $900 or the last $7,200? Neither is necessary - First $900 is exempt; the last $7,200 is already included in the taxable income. • FYI Income 26 “Filing on Unearned Income For a Minor Child” August 2008 Colorado Department of Revenue Slide 8 Charitable Contribution Deduction Addback • A charitable contribution deduction addback is required for individuals who claim both a charitable contribution deduction on their federal income tax return and a gross conservation easement credit on their Colorado return. • The addback is required irrespective of whether the donor applies the credit against his/her tax liability or transfers the credit, either in full or in part. • The amount of the credit claimed, the amount of the deduction allowed and any limitation on the taxpayer’s total itemized deductions may all impact the calculation of the addback. • FYI Income 39 “Gross Conservation Easement Credit” for additional information. August 2008 Colorado Department of Revenue Slide 9 Subtractions/Credits • Government Interest • Pension/Annuity • Colorado Source Capital Gain • Tuition Program Contributions • Charitable Contribution Government Interest • Interest from U.S. government obligations is generally exempt from Colorado income tax. • NOTE: A taxpayer receiving interest from a mutual fund which includes obligations that are exempt from Colorado income tax and obligations that are taxable may exclude only the interest from the exempt obligations. • EXAMPLE: A taxpayer has a mutual fund in which 90% of the interest received is from U.S. Treasury bills (an exempt obligation under Colorado law). The rest of the interest received from this mutual fund is from the Government National Mortgage Association (a taxable obligation under Colorado law). The taxpayer may exclude 90% of the mutual fund interest. • FYI Income 20 “United States Government Interest” August 2008 Colorado Department of Revenue Slide 11 Pension/Annuity • Colorado allows a pension/annuity subtraction for: – taxpayers who are at least 55 years of age as of the last day of the tax year; – beneficiaries of any age (such as a widowed spouse or orphan child) who are receiving a pension or annuity because of the death of the person who earned the pension. • This subtraction allows all or a portion of pension and annuity income taxable on the federal return to be exempt from Colorado tax. C.R.S. 39-22-104(4)(f). • Lump-sum distributions from a pension or profit-sharing plan that are reported on federal form 4972 should be added to line 3 of the 104 form, as this income would not be included in federal taxable income on line 1 of the 104 form. August 2008 Colorado Department of Revenue Slide 12 Pension/Annuity cont. • Qualified taxpayers who are under age 65 as of the last day of the tax year can subtract the smaller of: – $20,000, or – the taxable pension/annuity income included in federal taxable income and/or line 3 of the Colorado return. • Taxpayers who are 65 years of age or older as of the last day of the tax year can subtract the smaller of: – $24,000, or – the taxable pension/annuity income included in federal taxable income and/or line 3 of the Colorado return. • Each spouse must qualify by age to claim the pension subtraction. Each spouse’s subtraction is computed separately and no part of one spouse’s subtraction may be claimed by the other. • FYI Income 25 “Pension/Annuity Subtraction” August 2008 Colorado Department of Revenue Slide 13 Colorado Source Capital Gain • Qualified Colorado taxpayers may subtract certain net capital gain income earned from Colorado sources to the extent the gains are included in their federal taxable income. C.R.S. 39-22518. • The subtraction applies only to net capital gains earned from property located in Colorado. • The gain from the sale of stock or ownership interest also qualifies if the stock or ownership interest is of a ―Colorado company, limited liability company, or partnership.‖ These are entities that have 50% or more of their property and 50% or more of their payroll assigned to Colorado under the Multistate Tax Compact C.R.S. 24-60-1301 for the required holding period (e.g., one or five years). • Must report the property and payroll percentages on Form DR 1316 (information is confidential and cannot be disclosed). August 2008 Colorado Department of Revenue Slide 14 Capital Gain cont. • Because the sale of a sole proprietorship is not considered a sale of an entity, but only of its assets, such a sale does not qualify as a sale of an ―ownership interest.‖ Therefore, gains earned from intangibles owned by a sole proprietorship do not qualify for the subtraction. • Example: A Colorado taxpayer owns stock in a pass-through entity that has de minimus tangible property and payroll and whose only significant asset is stock held in another company. The Department will apply the ―Colorado source‖ and applicable holding period requirements to the underlying company to determine whether the pass-through of capital gain income from the sale of such stock qualifies for this subtraction. • FYI Income 15 “Colorado Source Capital Gain Subtraction” August 2008 Colorado Department of Revenue Slide 15 Tuition Program Contributions • You can deduct on your Colorado income tax return the payments or contributions you make to certain ―qualified state tuition programs.‖ C.R.S. 39-22-104 (4) (i). You cannot take this deduction if the payments or contributions were not included in your federal taxable income. • For purposes of this subtraction, a qualified state tuition program is a ―529 College Savings Plan‖ administered by College Invest and includes the Direct Portfolio College Savings Plan, Scholars Choice College Savings Program, Stable Value Plus College Savings Plan, and Prepaid Tuition Fund. • FYI Income 44 “State Tuition Program Contribution Subtraction” August 2008 Colorado Department of Revenue Slide 16 Tuition Program cont. Common Questions 1. Can I subtract the payments or contributions I make to a qualified tuition program of a different state? - No. You can only subtract payments/contributions made to a qualified state tuition program established by College Invest or to a qualified tuition program affiliated with a Colorado education institution. To date, College Invest is the only qualified tuition program in Colorado. 2. Federal tax law permits an individual to rollover an investment from one state qualified tuition program to another state qualified tuition program. If the individual does a rollover into one of Colorado's state qualified tuition programs is this considered a contribution that qualifies for the Colorado tax deduction? - No. Since the funds being rolled over into the Colorado state qualified tuition program are not included in federal taxable income for the tax year, a deduction is not allowed. August 2008 Colorado Department of Revenue Slide 17 Tuition Program cont. 3. Can an individual receive a tax deduction if they contribute to an unrelated individual's contract? - Yes. There is no requirement that the beneficiary be related to the contributor. 4. Is there a limit to how much I can subtract on my Colorado income tax return for payments or contributions? - No. However, the qualified state tuition program limits the amount of payments or contributions you can make to the program. 5. How can I receive additional information on College Invest and the plans that they offer? - Contact College Invest at www.collegeinvest.org, or (800) 448-2424. August 2008 Colorado Department of Revenue Slide 18 Charitable Contribution • For tax years beginning on or after January 1, 2001 any individual who claims the federal standard deduction instead of itemizing deductions on the federal return may be able to subtract a portion of his/her charitable contributions from Colorado taxable income. This subtraction will only be available in tax years during which the state’s fiscal year ends with a qualified surplus. C.R.S. 39-22-104(4)(m). • The charitable contributions subtraction is not available for tax years 2002 through 2005. The State of Colorado did not have a sufficient budget surplus for the years ending June 30, 2002 through June 30, 2005. • The charitable contributions subtraction will be available for tax years 2006 through 2010 because an exemption from the qualified surplus was activated when Referendum C passed at the November 2005 statewide election authorizing the state to retain and spend the budget surplus for those five years. C.R.S. 39-22-104(4)(m)(IV). August 2008 Colorado Department of Revenue Slide 19 Charitable Contribution cont. • The amount that can be subtracted from income will be equal to the amount in excess of $500 that could have been deducted on the Federal Schedule A under the Gifts to Charity section had the taxpayer itemized their federal deductions. • Example: Stephanie gave $700 to charity A and $200 to charity B during 2006. She did not have enough deductions to itemize her 2006 deductions, so she claimed the federal standard deduction. She can subtract $400 ($900 - $500) on the Qualifying Charitable Contribution subtraction line of Form 104. • FYI Income 48 “Charitable Contributions Subtraction” August 2008 Colorado Department of Revenue Slide 20 2008 Legislation Income Tax • Conservation Easement Credit • Child Care Facility Credit & Historic Preservation Credit • Employee Incentive Programs • Corporations/Partnerships • Checkoffs Conservation Easement Credit HB08-1353, effective 07/01/2008 • Establishes the Conservation Easement Oversight Commission which shall review transactions and advise both the Department of Revenue and the Division of Real Estate on easement related matters. • Establishes an application and certification program for conservation easement holders that will be administered by the Division of Real Estate. • Provides the Division of Real Estate with the authority to investigate and discipline easement holders. August 2008 Colorado Department of Revenue Slide 22 Easement Credit cont. • Provides the Board of Real Estate Appraiser with the authority to impose educational requirements upon investigate and discipline appraisers. • Requires that all appraisals for which a credit will be claimed be submitted to the Division of Real Estate along with an affidavit from the appraiser. The division will maintain a database of the submitted appraisals. • Limits tax basis in calculation of credit for properties held less than one year prior to donation. • FYI Income 39 “Gross Conservation Easement Credit” August 2008 Colorado Department of Revenue Slide 23 Child Care Facility Credit & Historic Preservation Credit HB08-1033 & HB08-1049, effective 08/05/2008 • Extends the sunset date of both tax credits to January 1, 2020. • The legislation provides that if the revenue estimate prepared by the legislative council in December 2010 and each December thereafter indicates that the amount of the total general fund revenues for that particular fiscal year will not be sufficient to maintain the limit on appropriations specified in C.R.S. 24-75-201.1(1), then the tax credits shall not be allowed for any income tax year commencing during the calendar year following the year in which the estimate is prepared. • FYI Income 7 “Investment Credits For Licensed Child Care Centers, Family Care Homes and Employers Providing Licensed Child Care Facilities” • FYI Income 1 “Historic Property Preservation Income Tax Credit” August 2008 Colorado Department of Revenue Slide 24 Employee Incentive Programs HB 08-1183, effective 08/05/2008 • Personal and Corporate Income Tax — Eliminates references to the rural area jobs requirements and streamlines the employer criteria in order to obtain a performance-based incentive from the Colorado economic development fund. Employers that qualify to receive performance based incentives for new jobs created under the new business facility employees credit pursuant to C.R.S. 39-30-105 and performance-based incentives will continue to be eligible to receive both the credit and the performance-based incentive. August 2008 Colorado Department of Revenue Slide 25 Partnerships/Corporations HB 08-1380, effective 01/01/2009 • Eliminates the two-factor and three-factor methods by which corporations and partnerships with income from multiple states apportion their income. • Requires all multistate corporations to apportion business income using a "single sales factor" by which business income is apportioned based upon the percentage of their sales occurring in Colorado. • Allows non-business income to either be apportioned in the same manner as business income or directly allocated. • Provides multistate partnerships the option to either allocate income pursuant to C.R.S. 39-22-109 or apportion income using the single sales factor. • Establishes a separate method for apportionment for mutual fund companies. August 2008 Colorado Department of Revenue Slide 26 Checkoffs • Colorado Watershed Protection Fund renamed Colorado Healthy Rivers Fund. • Colorado Healthy Rivers Fund, Alzheimer’s Association Fund and Military Family Relief Fund extended through tax year 2010 subject to minimum total contribution requirements. • Adult Stem Cells Cure Fund and 9Health Fair Fund added to the Colorado individual income tax return for tax years 2008 through 2010. August 2008 Colorado Department of Revenue Slide 27 2008 Legislation Sales Tax • Tax Exemption Salvaged Wood • School Sales/Fundraisers • Sales Tax Rates • Aircraft Sales Sales Tax Exemption - Salvaged Wood HB08-1269, effective 05/28/2008 • Creates a state sales/use tax exemption for products made from the wood of salvaged Colorado trees killed or infested by mountain pine beetles. The exemption also applies to RTD/CD/FD and RTA sales/use tax. The exemption is effective July 1, 2008 and will sunset June 30, 2013. • Products from beetle-infested wood include sawn lumber, furniture, wood pellets, wood shavings, and wood chips. The bulk of sales falling under this exemption will likely be from lumber, roundwood (which includes electrical poles and fence posts), timbers, and other sawn products. • The statute does not define a wood content percentage, but wood furniture and other wood products such as wood pencils contain small amounts of non-wood materials. Such wood products can still be considered to fall under this exemption. August 2008 Colorado Department of Revenue Slide 29 Sales Tax Exemption Salvaged Wood cont. • Wholesalers must verify with the manufacturer or distributor that the products are made from salvaged trees harvested in Colorado and complete and sign the form ―Certification for Sales Tax Exemption on Pine Beetle Wood‖ (DR 1240). • The wholesaler must provide a signed copy to each retailer that purchases these products for resale. The wholesaler must send a signed original of the DR 1240 form to the Colorado Department of Revenue Field Audit Section at the address listed on the form. • Retailers selling exempt products will list such sales under other exemptions on the exemptions worksheet when preparing their DR 0100 state sales tax return. • FYI Sales 84, “Sales Tax Exemption of Beetle Wood Products” August 2008 Colorado Department of Revenue Slide 30 School Sales – Tax Exemption HB08-1013, effective 09/01/2008 • Sales made by public and private K-12 schools, school activity booster organizations, and student classes or organizations are exempt from state sales tax if all proceeds of the sale are for the benefit of a school or school-approved student organization. Proceeds of sales by public school parent/teacher organizations can also be used for the reasonable expenses of the organization. • This state sales tax exemption includes, but is not limited to, fundraiser items such as gift wrap, bake sale goods, silent auction donation items, and booster club concession stand food items that are sold by the school or school-related organization. • FYI Sales 86 “Sales Tax Exemption on School Related Items” August 2008 Colorado Department of Revenue Slide 31 School Sales – Tax Exemption cont. • This sales tax exemption does not apply to state-collected city and county local sales tax unless they have added the exemption to their ordinances. Refer to the DR 1002, Colorado Sales/Use Tax Rates, to find information on cities and counties that have enacted this exemption. This exemption does apply to RTD/CD/FD special district sales tax and Regional Transportation Authority(RTA) sales tax. • To obtain items to sell for fundraising without paying tax to the vendor, school related organizations and PTO/PTA organizations should obtain a sales tax license if they do not already have one. New licensees should apply for a charitable sales tax license, which has a fee of $8. There is no state sales tax deposit for this license. Public schools should obtain a standard sales tax license. There is no fee or deposit requirement for public schools. August 2008 Colorado Department of Revenue Slide 32 Exemption - Components for Production of Electricity Renewable Energy Source HB08-1368, effective 05/27/2008 • Provides that counties and municipalities that have adopted a local sales tax ordinance can levy a sales tax on sales of components used in the production of electricity from renewable energy sources, including but not limited to wind, unless exempted by local ordinance or resolution. • Exemption applies to the components used in production of alternating current electricity including, but are not limited to: wind turbine generators, rotors and blades, solar modules, trackers, supporting structures or racks, inverters, towers and foundations. • Refer to publication DR 1002 ―Colorado Sales and Use Tax Rates‖ for a list of localities that grant this exemption. • FYI Sales 83 “Sales Tax Exemption on Components for Production of Electricity from Renewable Energy Sources” August 2008 Colorado Department of Revenue Slide 33 Aircraft Sales HB1261, effective 08/05/2008 • Establishes a sales tax exemption for aircraft sold to persons who are not residents of Colorado when such aircraft are to be removed from Colorado within 120 days of the sale and the aircraft will not be in Colorado for more than 73 days in any of the three calendar years following the calendar year in which the aircraft is removed from the state. • The purchaser, at the time of purchase, must provide an affidavit to the seller that the purchaser is not a Colorado resident and that the purchaser agrees to pay Colorado sales tax if the purchaser fails to comply with the exemption requirements. An aircraft that is hangared or parked overnight is considered to be in the state. • FYI Sales 85 “Sales Tax Exemption on Aircraft and Aircraft Parts” August 2008 Colorado Department of Revenue Slide 34 Helpful Hints • Avoiding Tax Errors/Delays • Colorado W-2s Miscellaneous Tax Errors 1. When an individual decides to be excluded in the composite return, he/she can file an individual return and have the company pay an estimate on his/her behalf. The estimate should be sent in with a payment from the company along with form DR108. The taxpayer should send a copy of the DR108 and a copy of the cancelled check (front and back) so Revenue can properly credit the correct account. 2. Are you using the correct forms? For example, a tax preparer used the 2006 tax return and copied the 2007 information over the 2006 information. The tax preparer filed all of his/her clients’ returns on this form. Since the lines don't always match up, there were issues with all of these returns. 3. Many errors occur because instructions outlined in tax booklets and/or FYI publications are not followed. August 2008 Colorado Department of Revenue Slide 36 Tax Errors cont. 4. Use the correct form (the correct year) when submitting payments. Make sure the social security number and other identifiers are on the payment to ensure proper posting. 5. Do not assume that because there is a carry-forward credit, or the credit has been taken in the past that the credit claimed on the current year filing will be accepted. 98% of the processing delays occur because of this error. 6. Fill out the form completely that corresponds to the credit. For example, many capital gains subtractions are delayed/denied because the property description is too vague or missing, the payroll/property % is not included for stock sales, and/or the acquisition date is omitted. August 2008 Colorado Department of Revenue Slide 37 Tax Errors cont. 7. Filing more than one tax return for the same year. For example, if corrections are needed, file an Amended return (form 104X). 8. Consult FYIs regarding what subtractions from federal income can be taken on Colorado return. 9. Send injured spouse claims separately – Do not send with return. 10. Not claiming/accounting for carry-forward credits from prior years. August 2008 Colorado Department of Revenue Slide 38 Tax Errors cont. 11. Treat electronic/paper filings same. For example, if the credit requires documentation, fill in as much as you can online. Also, after submitting the return electronically, send a paper copy of all schedules, certificates, forms, etc. needed for the credit – will save the DOR time ordering the returns and/or requesting copies of the forms. 12. Credit for taxes paid to other states. Errors occur because the 104PN is filed in conjunction with the other state(s) return(s) and form 104CR is not attached to the return. August 2008 Colorado Department of Revenue Slide 39 Tax Errors - Credits Enterprise Zone Credits 1.The credit is taken from a pass-through entity and documentation is lacking to show the percentage of ownership in the partnership or S Corporation. Attach this documentation to the 104CR form/tax return. 2.The certificates are not attached. In the case of carryover credits, attach a carry-forward schedule. Calculating the correct % of credit (25% or 12.5% of the donation amount) for contributions. 3.Enterprise Zone certificates must be signed by an administrator. August 2008 Colorado Department of Revenue Slide 40 Tax Errors – Credits cont. Gross Conservation Easement Credits 1. All transferees must include a completed form DR 1305 with their return. 2. All donors must submit completed forms DR 1305 and DR 1303 as well as all additional attachments listed on the DR 1303. Electronic filers must submit the DR 1303 and additional attachments separately from their income tax return. 3. All donors must also submit a completed form DR 1304 separately from their income tax return. This form may be filed online at www.TaxColorado.com. Child Care Contribution Credit 1. Only 50% of the contribution can be claimed. 2. Form 1317 must be included. Donation confirmation letters alone will not suffice. August 2008 Colorado Department of Revenue Slide 41 Tax Errors – Credits cont. Alternative Fuel Credits 1. Attach the bill of sale showing the vehicle registered in the primary or joint filer’s name. 2. Only vehicles listed in the FYI are eligible for the credit. E-85 vehicles are NOT eligible for the credit. 3. Credit must be claimed in year of purchase, if no tax liability exists for the year of purchase. The credit must be claimed and carried forward in its entirety. 4. Only the amount of the credit in excess of the net taxes due for the year of purchase may be carried forward to the following year. Final note: If a return is selected for review, any/all credits will be verified. $100 credit with no documentation will delay a $100,000 refund. Therefore, always include ―documentation‖ and follow the FYIs/instructions. Don’t assume the DOR knows the carry forward amounts from prior years. August 2008 Colorado Department of Revenue Slide 42 W-2s/Paystubs • In contact with your clients in December/January? Advise them to keep their last pay stub from an employer so that the information contained on the stub can be used for their tax filing. This is helpful in case they lose W-2 forms or employer does not provide a W-2. • Final pay stubs should include the total amount of taxes withheld for Colorado. Taxpayers can use this information to fill out a W-2 Substitute form (DR 0084) to send with paper returns. If filing electronically, they’ll have the W-2 Substitute form for their records. • Need a Colorado W-2 Substitute form? Go to www.Taxcolorado.com and click on ―forms.‖ August 2008 Colorado Department of Revenue Slide 43 Miscellaneous • Nonresident Partners/Shareholders • Forms – Potential Changes 2008 • Online Tax Payments/ Agreement To Pay (ATP) Nonresident Partners/Shareholders • A nonresident partner/shareholder can complete Form 0107, Colorado Nonresident Partner or Shareholder Agreement. This establishes that the taxpayer is required to file a Colorado income tax return. Form 0107 must be submitted to the Department of Revenue each year. • Withholding is required for any nonresident partner/shareholder who fails to complete, sign and return Form 0107 to the partnership/ corporation prior to the due date of the return, and not included in a composite return. August 2008 Colorado Department of Revenue Slide 45 Partners/Shareholders cont. • The partnership/corporation must withhold 4.63% of the taxpayer’s Colorado source income. The amount withheld is submitted with Form 0108, Statement of Colorado Tax Remittance for Nonresident Partner or Shareholder. The amount withheld is credited to the taxpayer’s account and is claimed on the taxpayer’s return as an estimated tax payment. • FYI Income 54 “Nonresident Partners and Shareholders of Partnerships and S Corporations” August 2008 Colorado Department of Revenue Slide 46 Potential Changes – Forms 1. Form 104 - list of common eligible credits on line 12 "Other subtractions" with checkboxes to identify the subtraction – to cut down the erroneous subtractions taken. 2. Form 104CR - checkboxes on the applicable lines of page 2 of the form so that taxpayers can indicate if the credit they are claiming is carried forward from a prior year. 3. Form 104PTC - Moved some pages in the booklet. The affidavit included now requires an Alien Registration Number if the applicant is not a U.S. citizen. 4. Form 104CR and 112CR instructions have been revised to direct the taxpayer to enter on the applicable lines only the amount of the credit that is being applied to the particular tax year. August 2008 Colorado Department of Revenue Slide 47 Online Tax Payments/ATP • Online tax payment is available. Pay tax owed by using a checking or savings account or by credit card with our online tax payment service at www.colorado.gov/paytax. Payments are applied within 24 hours after submission. • If the taxpayer is unable to pay the balance due in full, the taxpayer can apply for an Agreement to Pay (ATP). Additional penalty will not be assessed after the installment plan is set up, however interest will be added for the term of the plan. • There are two automated methods to request an Agreement to Pay plan: – Colorado Income Tax Account service on the Web at www.myincometax.state.co.us – Automated telephone system at (303) 238-FAST (3278). Press 3 in the menu to reach the automated system. August 2008 Colorado Department of Revenue Slide 48 Online Tax Payments/ATP cont. • Monthly payment coupons are mailed to the taxpayer within 30 days. • If taxpayers disagree with the balance due notice they can protest the amount due. Taxpayers must send a letter for a hearing to present the facts and arguments. • This written application must be filed within 30 days from the date of the notice. The 30-day period is fixed by statute and cannot be extended. Be aware the protest review process can take some time. • The written application (protest) must contain the following information: – Taxpayer’s name and address – The bill notice number and the taxpayer’s Social Security number – The tax period/year involved – The amount of income tax in dispute – A statement summarizing the reasons the taxpayer believes tax is not due • Mail to: Colorado Department of Revenue, Protest Section, 1375 Sherman St. Denver, CO 80261 August 2008 Colorado Department of Revenue Slide 49 Resources/ Online Services • Draft Forms Comments • Electronic Services • CDOR Resources • Classes Draft Form Comments • The draft forms are available through the DOR main Web page, www.TaxColorado.com 1. Tax Professionals 2. Forms, Publications, References 3. Draft Forms 4. Email Us • Comments & suggestions for any form may be submitted to: TaxFormComments@spike.dor.state.co.us • Comments and suggestions will be accepted until mid October 2008. • Note: Tax-specific questions cannot be answered through this email address. August 2008 Colorado Department of Revenue Slide 51 E-File Corporations • Electronic filing of Colorado C-corporation income tax is now available. Colorado participates in the IRS Modernized e-File (MeF) program. The Colorado Department of Revenue accepts several software providers who have updated their software to add Colorado e-file for tax years beginning in 2007. • Software accepted by Colorado for filing 2007 C-corporation income tax as of June 2, 2008. – CCHProSystem fx Tax; www.cchgroup.com/Tax – Creative SolutionsCS Professional Suite; http://cs.thomson.com/ – DrakeDrake Tax Solutions; www.drakesoftware.com – CCH Small Firm ServicesTaxWise; www.taxwise.com • Corporations that want to efile to Colorado with their own accounting software should contact Steve Asbell at sasbell@spike.dor.state.co.us August 2008 Colorado Department of Revenue Slide 52 Resources Colorado Department of Revenue 1. Tax Practitioner Hotline: 303-232-2419 2. www.TaxColorado.com (Forms, FYI publications, Online Customer Support, Statutes & regulations, Links to other government agencies, Tax Alerts) 3. Email: publiceducation@spike.dor.state.co.us 4. Online Customer Support 5. Tax Information Index 6. ―CDOR Tax InfoEmail‖ Subscription Service 7. Forms Department Fax: 303-866-4407 8. Walk-in Service Centers, Hours: M-F, 8 a.m. - 4:30 p.m. - Denver (1375 Sherman Street - 14th & Sherman) - Colo. Springs, Ft. Collins, Grand Junction, Pueblo August 2008 Colorado Department of Revenue Slide 53 Tax Classes Free Classes - Department of Revenue 1. Sales/Use Tax for Beginners – Content online 2. Advanced Sales/Use Tax – Content online 3. Employer/Employee Basics 101 (federal and state wage withholding, unemployment tax and workers’ compensation) – Content online 4. Contractor/Manufacturing – Content online 5. Hospitality – Content online 6. Printing/Advertising – Content online 7. Application of Use Tax in Colorado – Content online Note: Some of the classes above are also offered online where you can obtain CPE credit. However, not all classes are currently available in this format but will eventually be added. So, be sure to check the Web site often for new class offerings. Or, contact publiceducation@spike.dor.state.co.us August 2008 Colorado Department of Revenue Slide 54 Questions? Thanks for attending and have a great tax season!