TIN ComplianceA resource from TIN Comply
Backup withholding
Yes, individual rate
Nonresident payments
No
State withholding

Colorado backup withholding and nonresident contractor withholding

Colorado’s rule sits inside the wage withholding statute and is easy to miss. C.R.S. 39-22-604(18) requires any person paying a natural person for services reported on a Form 1099 to withhold Colorado income tax at the individual rate when the payee fails to provide a validated taxpayer identification number or provides an ITIN. A validated number is an SSN or ITIN the payer has confirmed through the IRS TIN matching program or an equally effective third-party check approved by the Department. Service payments that are not reported on any information return carry the same duty unless the payer holds a validated number. The payer is treated as an employer for deposits and returns, and production companies paying personal service corporations have a parallel rule in subsection (21).

State backup withholding requiredNonresident non-wage withholding not requiredSources checked November 1, 2026Updated November 1, 2026
In this guide
  1. Status
  2. State backup withholding
  3. What Colorado does not require
  4. Pass-through entity withholding
  5. From the source
  6. What to confirm
  7. Sources

Status

State backup withholdingRequired

Primary source (statute, regulation or agency publication saved in full); 2023 statute printout from the Office of Legislative Legal Services

Non-wage payments to nonresidentsNot required (inferred)

Inferred: no provision found in the saved statute or guide

Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in Colorado exactly as everywhere else; this page covers only what the state adds. The 50-state tables put Colorado next to its neighbours, and the Colorado 1099 filing page covers whether the state wants its own copy of the 1099.

State backup withholding

Trigger
C.R.S. 39-22-604(18)(a): any person who makes a payment for services to a natural person that is not subject to wage withholding but requires an information return (any version of Form 1099) must withhold Colorado income tax if the person who performed the services fails to provide a validated taxpayer identification number or provides an IRS number issued for nonresident aliens (an ITIN). Under 39-22-604(18)(b), a business or sole proprietor paying a natural person for services that are not reported on any information return withholds unless it holds a validated number. A validated number is an SSN or ITIN that the payer has confirmed through the IRS TIN matching program (via the state portal in C.R.S. 24-37.5-107) or another equally effective third-party verification approved by the Department (39-22-604(18)(f)).
Rate
The rate set forth in C.R.S. 39-22-104 (the individual income tax rate; the 2023 statute printout shows 4.40 percent for tax years from 2022, subject to temporary rate reductions under 39-22-627) or, for payments to entities under subsection (21), the corporate rate in 39-22-301. Confirm the current year's rate with the Colorado Department of Revenue.
Statute
C.R.S. 39-22-604(18) (service payments to natural persons without a validated TIN); 39-22-604(21) (production company payments to personal service corporations); 39-22-104 (rate)
Withholding return and forms
The statute names no separate form: a person that withholds under subsection (18) is treated as an employer withholding from wages for every other provision of 39-22-604 (39-22-604(18)(d)), so the withholding runs through the payer's Colorado wage withholding account. Confirm the filing forms with the Department of Revenue.
Deposit schedule
Same as employer wage withholding (39-22-604(18)(d))
Annual reconciliation
Same as employer wage withholding; the executive director may by rule allow the amounts to be paid with the state income tax return (39-22-604(18)(e))
Payee statement
Federal Form 1099 showing the Colorado withholding (the statute does not prescribe a state form)
Exemptions
An individual exempt from federal withholding under a properly filed IRS Form 8233 when a copy has been filed with the Department (39-22-604(18)(c)); payments to a payee whose SSN or ITIN the payer has validated

What Colorado does not require

Withholding on non-wage payments to nonresidents

No withholding on non-wage payments to nonresidents: No nonresident contractor or entertainer income withholding. Colorado real estate withholding on nonresident sellers (39-22-604.5, Form DR 1079) and oil and gas severance tax withholding (DR 0021W) exist; both out of scope.

Basis: Inferred: no provision found in the saved statute or guide.

Pass-through entity withholding (out of scope)

Colorado requires composite return or withholding for nonresident owners (39-22-601(5), Form DR 0108). Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.

From the source

“Fails to provide a validated taxpayer identification number”

C.R.S. 39-22-604(18)(a)(I), 2023 statute printout, read November 1, 2026

What to confirm

  • The rate is set by reference to C.R.S. 39-22-104, which the 2023 printout shows as 4.40 percent for tax years from 2022; temporary rate reductions under 39-22-627 can change the figure for a given year. Confirm the current rate and the reporting forms with the Department of Revenue.
  • The provision defines a validated number by reference to the IRS TIN matching program, so a payer that matches every payee’s SSN or ITIN before the first payment, and keeps the result, has what the statute asks for.

Sources

Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.

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