How to File LLC Taxes in Colorado (2026)
How your Colorado LLC files taxes with the state comes down to its IRS classification. Single-member LLCs report on the owner's federal Form 1040 (Schedule C) and the state's Form DR 0104. Multi-member LLCs use federal Form 1065 and the state's Form DR 0106 instead.
An S-corp election keeps that same DR 0106. A C-corp election moves to Form DR 0112 instead. Every path pays Colorado's flat 4.4% rate through the Department of Revenue, Taxation Division.
This page maps each form to its due date and rate. It also covers Colorado's pass-through entity election, employer taxes, sales tax and what's deductible. The federal rules behind each classification are explained in full elsewhere on the site.
Quick Summary
- File with two agencies. The IRS handles your federal return, and Colorado's Department of Revenue handles the state return.
- Confirm this year's rate before you file. Check the current DOR figure.
- Talk to a CPA before electing S-corp or PTET status. Both can lower your bill, but only when the math fits your LLC.
Colorado LLC tax summary
The table below maps each Colorado LLC tax classification to its federal form, state form and where it's filed. It also lists the deadline and tax rate for each one.
| LLC Type | Federal Form | State Form | Filed With | Filing Deadline & Tax Rate |
|---|---|---|---|---|
| Single-member LLC | Form 1040, Schedule C | Form DR 0104 | Colorado Department of Revenue, Taxation Division | April 15 4.4% flat rate (owner's personal return) |
| Multi-member LLC | Form 1065 | Form DR 0106 | Colorado Department of Revenue, Taxation Division | April 15, 6-month extension to Oct 15 4.4% flat rate (per member's share) |
| S-Corp election | Form 1120-S | Form DR 0106 | Colorado Department of Revenue, Taxation Division | April 15, 6-month extension to Oct 15 4.4% flat rate (per member's share) |
| C-Corp election | Form 1120 | Form DR 0112 | Colorado Department of Revenue, Taxation Division | May 15, 6-month extension to Nov 15 4.4% flat rate (entity-level) |
How Colorado LLCs are taxed
Every Colorado LLC starts as a pass-through entity by default. A single-member LLC is disregarded, so its profit flows straight to the owner's personal return. A multi-member LLC works differently. It files its own information return first. The profit then passes through to its members.
An LLC can switch that default by filing an election with the IRS to be taxed as an S-corp or a C-corp. Colorado follows whichever classification the IRS assigns, so the state form matches the federal one.
Once you start an LLC in Colorado, this classification decides which forms you file every year. See our guide to filing LLC taxes for how the IRS treats each election.
Colorado state taxes by LLC type
Colorado's state tax form and rate depend on how your LLC is classified. Each classification carries its own form, due date and filing rule.
1. Single-member LLC: Form DR 0104
A single-member LLC files no separate state return. The owner includes the LLC's profit or loss on their own Form DR 0104, Colorado's individual income tax return, and pays the flat state rate on that income.
File that return by April 15 for a calendar-year filer, the same deadline the IRS sets for the federal Form 1040.
2. Multi-member LLC: Form DR 0106
A multi-member LLC pass-through files Form DR 0106 by April 15 for a calendar-year LLC, the Colorado Partnership and S Corporation Income Tax Return.
Colorado grants an automatic six-month extension to file, moving the date to October 15, though the extension doesn't cover payment. Each member reports their own share on their DR 0104.
3. S-Corp election: Form DR 0106
Electing S-corp status starts with federal Form 2553, filed with the IRS to make the election. The LLC then files Form 1120-S with the IRS every year to report its income.
Colorado still requires that same Form DR 0106 for the S-corp election, with the return due April 15 for calendar-year filers.
That due date gets the same six-month extension as the pass-through filing, moving it to October 15, but the payment stays due April 15.
Members pay Colorado's flat rate on their own share of the income. The entity itself pays nothing directly at the state level, unless it elects Colorado's pass-through entity tax.
4. C-Corp election: Form DR 0112
An LLC files Form 8832 with the IRS to elect C-corp status, then files Form 1120 with the IRS again each year to report its income.
At the state level, the LLC uses Form DR 0112 instead of DR 0106, due May 15 for a calendar-year filer.
That's a month later than the pass-through deadline. Colorado grants the same automatic six-month extension here, moving the date to November 15. The extension covers filing only, not payment.
Colorado taxes the corporation's income directly at the flat rate. Shareholders then pay personal tax again on any dividends they receive.
Colorado income tax rate for tax year 2026
Colorado taxed individuals at a flat 4.4% rate for tax year 2025, per the Department of Revenue's own filing instructions [1]. That same 4.4% rate applies to corporations for tax year 2026 too. Colorado sets this rate by statute. Confirm the current figure on the Department of Revenue's site before you file.
Federal taxes Colorado LLC owners pay
Every Colorado LLC owner also owes federal tax on the income the business makes. That's true no matter how the state taxes it.
1. Federal income tax
The IRS taxes the profit you withdraw, or that passes through to you, at your personal tax bracket. Your deductions and exemptions reduce that amount first. Your filing status and total income decide which bracket applies.
2. Federal self-employment tax
Members who actively work in the LLC owe a 15.3% self-employment tax on their share of the profit. That covers 12.4% for Social Security and 2.9% for Medicare. Colorado charges no separate state-level self-employment tax on top of that.
If you expect to owe $1,000 or more, pay quarterly estimated tax by April 15, June 15, September 15 and the following January 15.
Other Colorado taxes that may apply
Beyond income tax, a Colorado LLC may owe several other state and local taxes depending on what it sells and whether it has employees.
1. Employer taxes
An LLC with employees must register for unemployment insurance premiums with the Colorado Department of Labor and Employment, then pay those premiums on each worker's wages.
The taxable wage base rose to $30,600 per employee for 2026, up from $27,200 in 2025. New employers start on an industry-based introductory rate instead.
2. Sales and use tax
If your Colorado LLC sells tangible goods or certain taxable services, register for a sales tax license first. The state sales tax rate is 2.9%.
Most cities, counties and special districts add their own tax on top of that. Many Colorado home-rule cities set and collect their own local sales tax instead of using the state's rate.
3. Industry and local taxes
Some Colorado cities levy their own Occupational Privilege Tax on top of state taxes. Denver, Aurora, Glendale, Greenwood Village and Sheridan each charge this local tax.
The tax applies to employees and employers working inside city limits. Each city sets its own income threshold and rate, so check the rule for your city.
Colorado also taxes a few industries directly. That list includes cigarettes, marijuana, liquor, motor fuel and oil and gas severance.
One more rule applies to any LLC with staff. Workers' comp insurance is required for even one worker, part-time, full-time or family [2].
Colorado pass-through entity tax (PTET) election
Colorado's SALT Parity Act lets a qualifying partnership or S-corp elect to pay Colorado income tax at the entity level [3].
That's instead of passing the tax through to owners. The election taxes the entity's Colorado income at the same flat rate that applies to individuals and C-corps.
The point of the election is a federal limit. Individual itemizers can only deduct so much state and local tax on their own return.
Recent federal tax law raised that cap to $40,000 for tax years 2025 through 2029. The cap goes up a bit each year, then drops back to the old limit after that.
Paying the tax at the entity level instead lets the LLC deduct the full amount as a business expense on its federal return. Each owner then claims a matching credit on their own Colorado return.
Make the election every year by filing Form DR 1705. Once made, it binds every partner and shareholder for that year and can't be reversed. Talk to a CPA first, since the election only helps owners who itemize and still hit the cap.
What is deductible for a Colorado LLC
Most of what a Colorado LLC deducts happens at the federal level. Ordinary and necessary business expenses reduce the profit that flows through to your return.
That lower profit is what your personal or corporate return gets taxed on, at both the federal and state level.
Eligible owners may also claim the federal Qualified Business Income deduction under Section 199A. That break applies to your federal return only.
Colorado does offer its own income tax credits for specific activities. The current list and dollar limits are published on the Department of Revenue's credit schedule. A CPA familiar with that schedule can tell you which credits apply to your LLC.
FAQs
Do Colorado LLCs Pay Franchise Tax?
No, Colorado LLCs do not pay a separate franchise or privilege tax. The state taxes LLC income only, through the individual or corporate income tax depending on classification.
Does Colorado Require Workers' Compensation for a One-Person LLC?
No, Colorado does not require workers' compensation for a one-person LLC with zero employees. Colorado requires workers' compensation once the LLC hires its first worker, even part-time or a family member.
References:
- https://tax.colorado.gov/sites/tax/files/documents/Book104_2025.pdf
- https://cdle.colorado.gov/dwc
- https://tax.colorado.gov/sites/tax/files/documents/ITT_SALT_Parity_Act_Oct_2025.pdf
