Is there a problem with the computed value on Line 1 of Colorado Form 104? A negative value is being entered even though the Federal Form 1040 Line 15 is 0.

[keithspitz]

My Federal income is negative this year, but it is reported (per instructions) as $0 on my Form 1040 Line 15.  Okay, now onto State.  Line 1 on my Colorado Form 104 Line 1 says to enter the number from Federal Form 1040 Line 15.  But instead of $0 (which is the number on the form), the negative income value is being entered.  This doesn't seem right.

[JohnW152 · Accepted solution]

No, there's nothing wrong with the negative computed value you're seeing on line 1 of Form 104.  Rest assured that the state program is working as intended.

This simply reflects an inconsistency in the instructions between your federal and state returns.

If you'll look at your federal Form 1040, the instruction next to line 15 is " If zero or less, enter -0-."  So, even if the actual computation was negative, you'd need to enter a zero amount on line 15.

However, the DR 104 Book line 1 states that the amount should be entered as a negative: 

If your federal taxable income is a negative amount, be sure to enter the amount as such on your Colorado return. If submitting a paper return, put the negative amount in parentheses, for example ($1,234).

[keithspitz]

@JohnW152, thank you for the excellent answer.  It's very clear and understandable and it answered my question thoroughly and accurately.