What are the penalties for late payment or filing of state taxes in Colorado?

In Colorado, the penalties for late payment or filing of state taxes can vary based on the specific circumstances. When an individual or business fails to file a tax return by the due date, the Colorado Department of Revenue imposes a penalty of five percent of the unpaid tax amount for each month the return is late, up to a maximum of twenty-five percent. For failure to pay the taxes owed by the original due date, a separate penalty of one percent of the unpaid tax is applicable for each month the payment is overdue until the entire tax due is paid. It is important to note that these penalties can accumulate quite quickly and increase the overall financial burden on the taxpayer. Additionally, interest accrues on unpaid tax amounts at a rate specified by the Colorado Department of Revenue. This interest is calculated on a daily basis and can further increase the amount owed over time. Taxpayers should make every effort to file their returns on time and pay any taxes due to minimize penalties and interest. For the most accurate and up-to-date information regarding penalties, taxpayers are encouraged to visit the Colorado Department of Revenue's official website, which provides comprehensive resources and guidelines.