Colorado Alternative Minimum Tax (AMT)
The Colorado Alternative Minimum Tax (AMT) is a separate tax calculation designed to ensure that individuals with certain types of income pay a minimum amount of state income tax. It applies to taxpayers whose federal alternative minimum taxable income (AMTI) exceeds a threshold, and it is calculated using Colorado-specific rules.
How Colorado AMT Works
- Colorado AMT is calculated as 3.47% of Colorado alternative minimum taxable income, minus the taxpayer’s Colorado normal tax.
- Colorado alternative minimum taxable income is based on federal AMTI, adjusted for state-specific additions and subtractions.
- Taxpayers must file Form DR 0104AMT to calculate their AMT liability.
- The AMT is triggered when the 3.47% of Colorado AMTI exceeds the taxpayer’s normal Colorado income tax.
Key Form and Instructions
- Form DR 0104AMT: Used to compute the Colorado AMT. Line 2 requires the sum of lines 3 through 7 and line 9 from Form DR 0104. Line 4 requires the sum of all subtractions from DR 0104AD (excluding state income tax refund and interest from Colorado or its subdivisions).
- Form DR 0104: The main Colorado individual income tax form, which provides the base taxable income used in AMT calculations.
Important Notes
- Colorado AMT is not a direct copy of the federal AMT; it uses federal AMTI as a starting point but applies state-specific modifications.
- Taxpayers must determine their federal AMTI using IRS Form 1040 or equivalent, then adjust for Colorado-specific items.
- Part-year residents and nonresidents may have special rules for allocating AMTI between states.
Source:
Form DR 0104AMT
Form DR 0104
Disclaimer: Always verify details with official forms and instructions from the Colorado Department of Revenue. This information is for guidance only and may not reflect all applicable rules or changes.