Colorado Payroll Instructions

TurtleSoft provides free federal and state withholding tax table updates around the first of each year. Click here to download free updates for Colorado and federal payroll tax tables.

Colorado has state income tax withholding, with just one deduction and a relatively flat tax rate. Withholding formulas became even flatter in 2020. The tax rate dropped slightly for 2023. Rates have changed thirteen times in the past 32 years.

Colorado State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Open the Payroll tab on the left, and choose Employees.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field (see note below).
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of Colorado state dependents into the State Exemptions field.
  7. Enter a Colorado Tax Package into the Tax Package field, based on the employee’s W4 form. Choose Old W4 for pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it. HINT: If you don't see Colorado packages in the list, you'll need to import the tax info first.
  8. Click OK.

Colorado State Unemployment Tax Instructions

Colorado Unemployment Insurance tax is based on the first $20,400 of annual wages for each employee (2023 rate, after two big jumps). The starting rate is 1.77% for new businesses in general construction (higher for "heavy" construction, slightly lower for most others). After the first year, the Colorado SUTA tax rate recalculates, based on your past payroll totals and unemployment claims filed by your employees.

To enter your Colorado SUTA tax rate into Goldenseal payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.You'll see a list of Tax Items. Open the Colorado SUTA item HINT: If you don't see Colorado SUTA in the list, you'll need to import Colorado tax tables first.
  2. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  3. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.

Colorado Marital Status

Use the following to determine the value for the Marital Status popup menu in each Employee account:

State Tax Contacts

Website

Little Known Colorado Tax Fact

Contrary to popular opinion, Colorado residents are not allowed to claim marijuana plants as dependents.

Official State Lawn Ornament

Fracking rig.