Withholding from 1099 payments

State income tax withholding is not generally required with respect to various types of income not mentioned in this Part 5. However, Colorado income taxes may be withheld from other types of income at the recipient’s request. Such requests should be directed to the person, business, or organization paying the income. Taxpayers commonly request Colorado income tax withholding from pension or unemployment compensation they receive.

A payer who withholds Colorado income tax must report the withholding on the IRS Form 1099 issued to the recipient. Taxpayers may claim credit for the withholding on their Colorado Individual Income Tax Return (DR 0104) and may claim a refund if the withholding exceeds the amount of tax due. A copy of any Form 1099 reporting Colorado withholding must be submitted with the taxpayer’s return.