Latest Compliance News

Colorado employee withholding certificate update

06/02/2022

Author: ADP Admin/Tuesday, May 31, 2022/Categories: Compliance Corner

Back in November 2021, the Colorado Department of Revenue issued a new employee withholding certificate, Colorado Form DR 0004.  ADP® is in the process of updating its payroll systems to accept employee elections submitted on Form DR 0004.  This update will take effect June 9, 2022.  As part of the system update to enable use of Form DR 0004, ADP will use employees’ federal marital status for Colorado income tax withholding and will not allow employees to elect a different marital status for Colorado. 

The details

Prior to the Form DR 0004, state income tax withholding for employees in Colorado was calculated using only employees’ federal income tax withholding elections, made using IRS Form W-4.  Form DR 0004 must now be used by employees in Colorado who wish to adjust their state withholding.  In the absence of a Form DR 0004, Colorado withholding will continue to be calculated using employees’ Form W-4 elections.

Under Colorado law, an employee is required to use the same marital status for both federal and state withholding elections.  Any changes to marital status must be made using IRS Form W-4 and will be effective for both federal and Colorado withholding. 

In addition, any employees who currently have elected a marital status in Colorado that differs from federal will be updated in ADP systems to solely reflect the federal marital status for both federal and Colorado withholding calculations.  This change will take effect for payrolls processed on or after June 9, 2022.  You can obtain a list of your impacted employees by requesting an employee jurisdiction report through ADP Reporting. 

Next steps

We recommend that you notify impacted employees in advance of this change and advise them that they may make changes to their marital status that will apply to both federal and Colorado income tax withholding via Employee Self Service: Myself > Pay > Tax Withholdings.

Please contact your ADP Service Representative if you have questions.

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