Underpayment of Estimated Tax

where to send estimated tax payments

General Rules

If a taxpayer fails to meet the installment payment requirements, there will be added to the tax due an amount determined at the rate established under c. 62C, s. 32 on the amount of the underpayment for the period of underpayment. The underpayment penalty is calculated on Massachusetts Form M-2210.

Calculating the Underpayment Penalty:

  1. tax after certain credits, Massachusetts Form 1, Line 31, or 1 NR/PY, Line 36;
  2. multiply by (.80) 80%;
  3. subtract estimated payments and withholding;
  4. net amount;
  5. multiply by applicable percentage (percentage varies per taxable year, see below);
  6. underpayment penalty due.

Calculating the Underpayment Penalty - Farmers and Fishermen:

  1. tax after certain credits, Massachusetts Form 1, Line 31, or 1 NR/PY, Line 36;
  2. multiply by (.6666) 66.66%;
  3. subtract estimated payments and withholding;
  4. net amount;
  5. multiply by applicable percentage;
  6. underpayment

    penalty due.

Certain Credits mean Limited Income Credit, Earned Income Credit and Senior Circuit Breaker Credit.

The period of the underpayment runs from the due date of the installment to the due date of the tax return which is the 15th day of the fourth month following the close of the taxable year. Note: If the 15th falls on a Saturday, Sunday or holiday, then the due date of the tax return would be the next business day.

Underpayment penalty rate is the current federal short-term interest rate plus four percentage points compounded daily. 

Underpayment penalty is calculated on either:

  • Form M-2210  . Underpayment of Massachusetts Estimated Income Tax, which is the excess of the required installment, over the amount of the installment paid on or before the due date for the installments; or
  • Form M-2210A  

    . Annualized Income Installment Worksheet

Source: www.mass.gov

Category: Bank

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