Shortly after October 16, 2017, the extended due date for individuals, the Colorado Department of Revenue (CDOR) began sending letters indicating estimated tax underpayment penalties. It has been determined that the CDOR system that calculates interest and penalties related to estimated tax payments did not take into account the Emancipation Day extended due date in 2016. As a result, the effective date of carryforward (from tax year 2015 to 2016) did not calculate correctly.
Penalties associated with this miscalculation have been nominal for most individuals and have ranged from $1 to $150, based on the taxpayer’s specific tax situation. Some adjustments may be more but will likely be less than $10.
CDOR is in the process of creating a fix to correct erroneous penalties for all individuals affected, with a goal for correction of January 31, 2018.
Whom this Affects
This issue only affects individuals who have received a potentially incorrect estimated tax underpayment notice from CDOR since mid-October 2017.
Actions to Take
If you have received a notice you believe to be in error, please provide this letter to your tax provider to confirm the adjustment is corrected when completing 2017 personal income tax filings. To learn more, please contact Samantha Juedes at email@example.com
or call us today at 303-740-9400.