Colorado registration and tax info

• Colorado Department of Revenue - income tax withholding
• Colorado Department of Labor and Employment 
  • Unemployment tax
  • Family and Medical Leave (starting in 2023)
• Local Colorado tax agencies - various

If you're starting a new business in Colorado, you'll need to register with the Colorado Secretary of State before registering with other agencies. Before you get started make sure you have the below:

• Federal Employer Identification Number (FEIN).
• A designated registered agent.

For companies formed outside of the state of Colorado, you'll want to double-check whether or not you need to register with, or provide documentation to, the Secretary of State. For more information about foreign business entities, check out the agency's FAQs here. 

Register for income tax and unemployment tax

1. Apply for both tax types online using MyBizColorado. 
   • Before you get started, check out the overview of the registration process from the agency.
2. Click Start when you're ready to begin the registration. 
   • This will get you registered with:
     • The Department of Revenue (DOR)
     • The Department of Labor and Employment (CDLE)
       • If your company is not yet liable for unemployment tax, your CDLE account won’t be activated just yet. Learn more below about what's required when you become liable. 

Once online registration is complete, you'll receive instant confirmation on MyBizColorado and they'll also send a letter in the mail. 

Enter the tax account information in Gusto

Once a valid Colorado work address has been added in Gusto for one or more employee(s), you can add your tax account information:

1. Go to the Taxes & compliance section and select Tax setup.
2. Scroll to the "Colorado Tax Setup" headline and select Manage taxes.
3. Enter your CO DOR withholding account number—this is typically an 8-digit number.
   • In order for Gusto to electronically make payments on your behalf, Colorado requires a Withholding Credit ID number in addition to your withholding account number—Gusto uses the withholding account number entered in Gusto to obtain the Withholding Credit ID directly from the agency.
     • If we're unable to obtain the Withholding Credit ID for any reason, you'll need to call the agency at (303) 238-7378 to troubleshoot. Some common reasons we cannot obtain your number include:
       • An incorrect withholding account number was entered in Gusto
       • You haven't opened a withholding account under the number provided,
       • The legal name provided does not match what is registered with the state.
   • If you need to update your account number: contact us from the Help section of your account—there may be tax implications if taxes have already been paid or filed to an incorrect account number.
4. Enter your CO DLE unemployment account number—this is typically a 9-digit number, usually formatted "123456.00-9"
   • The 7th and 8th numbers are often both zeros.
   • If your company is not yet liable for unemployment tax, read below for what to do in the meantime, and what to do when you become liable.

Running payroll in Gusto before you're liable for SUI

Your company becomes liable for state unemployment insurance tax once the company has:

• Paid $1500 in wages during a calendar quarter or;
• Had at least one Colorado-employee working for any part of the week, for 20 or more different weeks during a calendar year.

If you need to run payroll and do not yet meet the above requirements, Gusto allows it—we just suggest you add the "New employer SUI tax rate" specific to Colorado in the meantime.

• You can find the new employer rates for each state in this article, along with instructions on how to update the rate once you become liable and receive your company-specific agency assigned rate.

Action required once the company becomes liable

Once you exceed $1,500 in wages, you’ll need to email [email protected]. The email should include:

• Account number
• Business name
• FEIN
• The first check date of Colorado-payroll
• The actual date that the $1,500 gross wage threshold was met or exceeded

Once the agency has assigned a company-specific unemployment rate, they'll send you a Notice of Employer's Tax Rate (Form UITR-7) in the mail. Enter that rate in Gusto from the Taxes & compliance section of an admin account.

Colorado Paid Family and Medical Leave Insurance (FAMLI)—effective Jan 1, 2023

The Colorado Department of Unemployment has a new Paid Family & Medical Leave tax that affects your company’s payroll beginning in 2023. 

As your payroll provider, we’ll withhold and remit tax contributions on your company’s behalf for all payrolls with check dates beginning in Q1 2023.

• Note: Gusto does not support the ability for employers to cover 100% of employee FAMLI tax liability. We recommend speaking with a tax advisor or accountant to determine acceptable alternatives.

Do I need to register?

Yes—once you've registered, you'll receive your new 10-digit account number from the agency. 

1. Watch the step-by-step instructions in this My FAMLI+ registration video. 
2. Create your account on login.gov for two-factor authentication —after reading the recommendations, scroll down and click Create an Account.
   • Fill out the remaining prompts on login.gov.
3. You’ll be redirected to the My FAMLI+ portal after completing the steps on login.gov—fill out your company details to create a My FAMLI+ account.
   • Important: Use your FEIN to register the business and link the two accounts.
4. Once the My FAMLI + registration is complete, you’ll need to make Gusto your third-party administrator on the account—scroll to pages 31-33 of the My FAMLI+ Employer User Guide and follow the agency’s instructions.
   • When searching on the “Accounts” page for the TPA relationship to add, select Gusto Inc, which has an account number ending in 2850. 
   • Heads up: If you’re leaving another provider to join Gusto, you’ll need to remove the TPA relationship from the prior provider (detailed on pages 33-35).
5. After you've registered, you'll need to do the following in Gusto—we're still working on building out these new features for the tax (bear with us):
   • Enter your CO FAMLI account number.
   • Let us know if you're liable for the employer-portion of the tax.
   • Grant Gusto the third-party agent access we'll need to file and pay the taxes on your behalf. 

Participation and contribution requirements

An employer’s total nationwide employee count determines whether they pay the employer-share of the premium. Employer size is calculated annually by looking at the previous calendar year.

Employers only need to pay premiums for the employees who are localized in Colorado. A Colorado employee is someone who performs their work entirely in Colorado and whose work is subject to Colorado State Unemployment tax. More information regarding localization can be found in the FAMLI Division's Premium Rules at 7 CCR 1107-1, Section 1.5.6.C.

Unless your company is exempt, here are the requirements:

• Businesses with 9 or fewer employees nationwide
  • Your company does not have to contribute to the program. You must still register with the state in order to remit employee contributions. 
    Colorado employees must contribute 0.45% of their wages, until they meet the 2023 Social Security wage base amount (not yet determined). 
• Businesses with 10 or more employees nationwide
  • Your company contributes 0.45% of each Colorado employee’s wages
  • Colorado employees contribute 0.45% of their wage, until they meet the 2023 Social Security wage base amount (not yet determined)
    
    • For example: If you have 100 employees nationwide, and 9 working completely in Colorado, the employer pays the 0.45% employer's share and collects and remits the 0.45% of the employee's share for each of those 9 employees.

If you have additional questions, you can learn more about the tax in this FAMLI resource, where you can access the FAMLI toolkit for employers. You can also contact the agency by email at [email protected].

Exempt employers

Employers can receive an exemption if they:

1. Offer their own paid leave program that is an equivalent plan.
2. Receive approval from Colorado DOL.

If you think your company is exempt from FAMLI, you must confirm with the state or you could be liable for past withholdings and penalties. Once your exemption is confirmed, reach out to Gusto and we will apply the exemption. Colorado is not expecting to approve exemptions until Q3 2023. Gusto will continue withholding until these exemptions can be placed.

How is the tax calculated?

Employer and employee contributions are calculated as a percentage of wages.

• Employers contribute 0.45% of employee wages—see the participation requirements above to determine if you’re responsible for the employer share of the premiums. 
• Employees contribute 0.45% of their wages, until the 2023 social security wage base amount is surpassed (not yet determined).

For example: If an employee made $1,000 in wages, the employee would pay $4.50 and the employer would pay $4.50.

FAMLI FAQs

Q: What if I already registered and Gusto also registers me? Will there be a problem?

A: No, there should be no issues with this. 

Q: If I employ fewer than 10 employees nationwide and therefore do not owe the ER premium, do I need to register?

A: Yes, you are still responsible to pay and file on behalf of your employees. You must register and select “yes” that they are liable. 

Q: I want to clear the “To do” item on my Gusto dashboard. What answer should I select?

A: You can select Yes. If we're unable to register for you, we'll email you. 

If you have employees working in one of the following locations, you or your employees may be liable for an Occupational Privilege Tax (OPT):

• Aurora
• Denver
• Glendale
• Greenwood Village
• Sheridan

Scroll below to get registration information.

What is an Occupational Privilege Tax (OPT)?

This is a uniform tax that includes both an employee and employer tax.

• Employees who make over a certain threshold amount per month are taxed per month—wage thresholds vary by agency.
• Employers are taxed per month for each employee—the employer tax per employee applies even if you do not run payroll.

Some Colorado cities also require employers to pay OPT for business owners and officers who are not included on payroll. In your Gusto account, we'll ask you to include how many business owners/officers are not considered employees but are subject to OPT taxes—do not include owners or officers that you are paying wages.

Denver OPT registration

1. Register a new business here. 
2. Scroll to the "Access & Registration" section and click Register a New Business.
3. If the agency required the company to file quarterly or annually, contact them at [email protected] to request that your filing frequency be changed to monthly.
   • Gusto defaults to the monthly deposit schedule which is recommended to avoid late payments and filings—we'll attempt to file monthly and if the filing fails, we'll update the schedule to the one assigned by the agency.

You can learn more about how taxation for Denver OPT works here.

Aurora OPT registration

1. Register online here—registration time can take 10-14 days.
2. Request that your deposit frequency be set to monthly by calling the agency at (303) 739-7000.
   • Gusto pays Aurora OPT taxes monthly, the most frequent schedule, in an effort to minimize potential penalty or interest.
3. For Gusto to file and pay Aurora OPT taxes, you must give Gusto third-party access to your Aurora Tax & Licensing portal—to do so, follow the instructions in the Third-Party Authorization is required dropdown below.

Gusto accepts either the Aurora OPT Business License Account Number or the Aurora account ID. Learn more about how taxation for Aurora OPT works.

Sheridan OPT registration

1. Register your business with the city.
2. Contact the city directly to request that your deposit frequency be set to monthly by calling (303) 762-2200.
   • Gusto pays Sheridan OPT taxes monthly, the most frequent schedule, in an effort to minimize potential penalty or interest.

Glendale OPT registration

1. Register your business with the city.
2. Contact the city directly to request that your deposit frequency be set to monthly by calling (303) 759-1513.
   • Gusto pays Glendale OPT taxes monthly, the most frequent schedule, in an effort to minimize potential penalty or interest.

Greenwood Village OPT registration

1. Register your business online with the city.  
2. Contact the city directly to request that your deposit frequency be set to monthly by calling (303) 486-8299.
   • Gusto pays Greenwood Village OPT taxes monthly, the most frequent schedule, in an effort to minimize potential penalty or interest.

Enter the tax account information in Gusto

Once a valid local address has been added in Gusto for one or more employee(s), you can add your tax account information:

1. Click the Taxes & compliance section and select Tax setup.
2. Scroll to the "Colorado Tax Setup" headline and select Manage taxes.
3. Enter the applicable account number.

Two agencies require that you make Gusto your third-party agent (TPA) before we can file and pay taxes on your behalf:

• The Colorado Department of Revenue
• The City of Aurora (Occupational Privilege Tax)

Add Gusto as your third-party agent with the CO DOR

1. Sign in to your account through the Revenue Online portal.
2. In the top-right section of the page, click Manage my profile.
3. Click the More... tab.
4. Click Grant Third Party Access in the access tile.
5. You'll need the following info:
   • Gusto's login = [email protected]
   • Access level = ALL ACCESS
   • Access start date = enter the first day of the first quarter you have a check date in Gusto for.
     • Example: if your first check date in Gusto was on February 14, 2022, you'd enter the Q1 start date of 1/1/2022.

Having trouble making Gusto your third-party agent?

• Verify that you've added the withholding tax type to your account.
• Make sure the following information entered into Gusto matches exactly what's on file with the CO DOR:
  • Official company name
  • Company address
  • FEIN - Federal Employment Identification Number
  • Withholding account number

If Gusto has trouble gaining the access we need, you'll need to call the CO DOR at (303) 238-7378 to troubleshoot and fix the issue.

Add Gusto as your third-party agent with the City of Aurora (Occupational Privilege Tax)

1. Sign in to your account through the Aurora Tax Portal.
2. From the home screen, select the Settings button. 
3. Under the “I Want To” menu, click Third party access and select Grant Access to a Third Party to continue.
4. This will open an "Add Third-Party Login" screen—use this to enter "zenpayroll'' as the username.
5. Select Yes on the "Include" column for tax type "Occupational Privilege Tax"—this allows us to file and pay on your behalf.
6. Click Next and then Submit when finished.

Withholding tax account number

If you've run payroll in Colorado in the past, you can find your withholding tax account number on:

• Online agency portal
• Form DR 1094—quarterly returns

The number is an 8-digit number—some documentation includes trailing digits (e.g.,12345678-003-WTH). In Gusto, enter only the first 8 digits (12345678) and not the trailing digits (003-WTH).

If you're unsure of your account number, call the Colorado Department of Revenue at (303) 238-7378.

Withholding credit ID

In order for Gusto to electronically make payments on your behalf, Colorado requires a Withholding Credit ID number in addition to your withholding account number—Gusto uses the withholding account number entered in Gusto to obtain the Withholding Credit ID directly from the agency.

If we're unable to obtain the Withholding Credit ID for any reason, you'll need to call the agency at (303) 238-7378 to troubleshoot. Some common reasons we cannot obtain your number include:

• An incorrect withholding account number was entered in Gusto
• You haven't opened a withholding account under the number provided,
• The legal name provided does not match what is registered with the state.

You can find your unemployment account number and current tax rate in the MyUI Employer website.

The tax rate in the agency website will be displayed as a decimal, not as a percentage. When you enter it in Gusto, please enter it as a percentage. For instance, if the agency website says 0.0644, this rate should be entered as 6.44% in Gusto.

If you're unsure what your account number or rate is, call the agency at (800) 480-8299.

If you have employees working in one of the below locations, you or your employees may be liable for an Occupational Privilege Tax (OPT).

You can find your existing OPT account number(s) and deposit schedule(s) on notices you've received from the local agencies. You can also contact the agency directly:

• Aurora
  • (303) 739-7000
• Denver
  • [email protected]
• Glendale
  • (303) 759-1513
• Greenwood Village
  • (303) 486-8299
• Sheridan
  • (303) 762-2200

If you need to register for an OPT tax, click the Register a company with state and local agencies dropdown above in this article.

Troubleshoot local tax issues

The most common issue is usually related to the tax deposit schedule. Gusto pays OPT taxes monthly, the most frequent schedule, in an effort to minimize potential penalty or interest. If we've let you know of a tax deposit schedule difference, contact the applicable agency directly and request that your deposit frequency be set to monthly.

Some Colorado cities also require employers to pay OPT for business owners and officers who are not included on payroll. In your Gusto account, we'll ask you to include how many business owners/officers are not considered employees but are subject to OPT taxes—do not include owners or officers that you are paying wages.

Two agencies require that you make Gusto your third-party agent (TPA) before we can file and pay taxes on your behalf:

• The Colorado Department of Revenue
• The City of Aurora (Occupational Privilege Tax)

Add Gusto as your third-party agent with the CO DOR

1. Sign in to your account through the Revenue Online portal.
2. In the top-right section of the page, click Manage my profile.
3. Click the More... tab.
4. Click Grant Third Party Access in the access tile.
5. You'll need the following info:
   • Gusto's login = [email protected]
   • Access level = ALL ACCESS
   • Access start date = enter the first day of the first quarter you have a check date in Gusto for.
     • Example: if your first check date in Gusto was on February 14, 2022, you'd enter the Q1 start date of 1/1/2022.

Having trouble making Gusto your third-party agent?

• Verify that you've added the withholding’ tax type to your account
• Make sure the following information entered into Gusto matches exactly what's on file with the CO DOR:
  • Official company name
  • Company address
  • FEIN - Federal Employment Identification Number
  • Withholding account number

If Gusto has trouble gaining the access we need, you'll need to call the CO DOR at (303) 238-7378 to troubleshoot and fix the issue.

Add Gusto as your third-party agent with the City of Aurora (Occupational Privilege Tax)

1. Sign in to your account through the Aurora Tax Portal.
2. From the home screen, select the Settings button. 
3. Under the “I Want To” menu, click Third party access and select Grant Access to a Third Party to continue.
4. This will open an "Add Third-Party Login" screen—use this to enter "zenpayroll'' as the username.
5. Select Yes on the "Include" column for tax type "Occupational Privilege Tax"—this allows us to file and pay on your behalf.
6. Click Next and then Submit when finished.

Once a valid local address has been added in Gusto for one or more employee(s), you can add your tax account information:

1. Click the Taxes & compliance section and select Tax setup.
2. Scroll to the "Colorado Tax Setup" headline and select Manage taxes.
3. Enter the applicable account number(s) and rate(s).