SUBCHAPTER 6D ‑ ESTIMATED TAX
SECTION .0100 ‑ FILING ESTIMATED INCOME TAX PAYMENTS
17 NCAC 06D .0101 FORMS
History Note: Authority G.S. 105‑163.15; 105‑163.18;
105‑254; 105‑262;
Eff. February 1, 1976;
Amended Eff. February 1, 1988; August 1, 1986;
Repealed Eff. June 1, 1993.
17 NCAC 06D .0102 REQUIREMENTS FOR
FILING
(a) Married individuals may make joint payments of
estimated income tax even if they are not living together; however, they may
not make joint estimated tax payments if they are separated under a decree of
divorce or of separate maintenance. Also, they may not make joint estimated
tax payments if either of them is a nonresident alien or if either of them have
different tax years. Whether a man and wife make joint estimated tax payments
or separate payments shall not affect their choice of filing a joint income tax
return or separate return. If they make joint payments and then file separate
returns, they may divide the estimated tax payments between them.
(b) A taxpayer filing a short period return because of
changing his income year shall make estimated income tax payments on the
installment dates which fall within the short period and 15 days after the
close of the short period which would have been due had he not changed his
income year. Interest on an underpayment of estimated income tax for a short
period shall be computed for the period of underpayment based on the tax shown
due on the short period return and computed in the same manner as it would have
been computed had the taxpayer not changed his income year.
(c) An individual may elect to have his or her income tax
refund applied only to estimated income tax for the following year. A return
reflecting an election to apply a refund to estimated tax for the following
year must be filed by the last allowable date for making estimated tax payments
for that year for the election to be valid.
(d) If an individual makes a valid election, that
individual may not revoke the election after the return has been filed in order
to have the amount refunded or applied in any other manner, such as an offset
against any subsequently determined tax liability.
History Note: Authority G.S. 105‑163.15; 105‑262;
Eff. February 1, 1976;
Amended Eff. May 1, 2006; June 1, 1993; October 1, 1991;
June 1, 1990; February 1, 1988.
SECTION .0200 – Interest on UNDERPAYMENT OF ESTIMATED INCOME
TAX
17 NCAC 06D .0201 GENERAL
Interest may be due for underpayment of estimated income
tax. The interest is computed separately for each payment period, therefore an
individual may owe interest for an early period even if that individual later
paid enough to make up the underpayment. If an individual did not pay enough
tax by the due date of each of the payment periods, the individual may owe interest
even if the individual is due a refund when the return is filed.
History Note: Authority G.S. 105-163.15; 105-236(a)(9);
105-241.21; 105-262;
Eff. February 1, 1976;
Amended Eff. May 1, 2006; June 1, 1990; August 1, 1986;
February 21, 1979;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. July 26, 2015.
17 NCAC 06D .0202 THE AMOUNT OF UNDERPAYMENT (TAXABLE
YEARS BEFORE 1986)
17 NCAC 06D .0203 THE PERIOD OF UNDERPAYMENT (TAXABLE
YEARS BEFORE L986)
17 NCAC 06D .0204 AVOIDING PENALTY (TAXABLE YEARS BEFORE
1986)
History Note: Authority G.S. 105‑163.15(b); 105‑163.15(c);
105‑163.15(d); 105‑163.18; 105‑262;
Eff. February 1, 1976;
Amended Eff. June 1, 1982; April 12, 1981; February 21,
1979;
Repealed Eff. June 1, 1990.
17 NCAC 06D .0205 ESTIMATED TAX PAYMENTS (TAXABLE YEARS
AFTER 1986)
History Note: Authority G.S. 105‑163.15; 105‑163.18;
105‑262;
Eff. August 1, 1986;
Repealed Eff. June 1, 1990.
17 NCAC 06D .0206 AVOIDING PENALTY
History Note: Authority G.S. 105‑163.15; 105‑163.18;
105‑262;
Eff. June 1, 1990;
Amended Eff. October 1, 1991;
Repealed Eff. June 1, 1993.
17 NCAC 06D .0207 UNDERPAYMENTS
(a) An underpayment is the excess of the required
installment (or, if lower, the annualized income installment) for a payment
period over the portion of the amount paid by the due date that is not applied
to an underpayment for an earlier payment period.
(b) Payments include income tax withheld and are considered
payments of estimated tax in equal installments on the required installment
dates (usual four), unless the individual can prove otherwise. A payment of
estimated tax is credited against unpaid installments in the order in which the
installments are required to be paid.
History Note: Authority G.S. 105‑163.15; 105‑262;
Eff. June 1, 1990;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. July 26, 2015.
17 NCAC 06D .0208 OVERPAYMENTS
An overpayment for any period occurs when the withholding
and estimated tax payments are more than the total of any underpayments for an
earlier period plus the lesser of the required installment or the annualized
income installment for the period. If there is an overpayment for a period, it
shall be carried to the next period and added to the withholding and estimated
tax paid for that later period to determine any underpayment or overpayment for
that later period.
History Note: Authority G.S. 105‑163.15; 105‑262;
Eff. June 1, 1990;
Amended Eff. June 1, 1993;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. July 26, 2015.
17 NCAC 06D .0209 DETERMINING AN UNDERPAYMENT
(a) No interest attributable to the underpayment of
estimated tax will be due if the estimated tax payments were made on time and
the payment for each period was at least as much as either the required installment
or the annualized income installment for the period. Form D‑422,
Underpayment of Estimated Income Tax, shall be used to determine any
underpayment.
(b) The required installment for any payment period is the
lesser of 22.5 percent of the tax shown on the current‑year return or 25
percent of the tax shown on the prior‑year return (if the prior‑year
return covered all 12 months of the year). However, if the annualized income
installment for any period is less than the required installment for the same
period and the annualized income installment is used in determining the
underpayment, the difference between the annualized income installment and the
required installment shall be added to the required installment for the next
period. If the annualized income installment for the next payment period is
used, the difference between the annualized income installment for that period
and the required installment (as increased) for that period shall be added to
the required income installment for the following payment period.
(c) There will be no underpayment for any payment period in
which the estimated tax payments, reduced by any amounts applied to
underpayments in earlier periods, were paid by the due date for the period and
were at least as much as the annualized income installment for the period.
History Note: Authority G.S. 105‑163.15; 105‑262;
Eff. June 1, 1990;
Amended Eff. September 1, 2008; June 1, 1993; October 1,
1991;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. July 26, 2015.
17 NCAC 06D .0210 PERIOD OF UNDERPAYMENT
(a) If a payment of estimated tax is applied to an
underpayment for an earlier period, but the payment is less than the
underpayment, there shall be more than one period of underpayment for the
earlier period.
(b) The first period of underpayment for any payment period
shall be from the day after the due date for the payment period to the date of
the first applied payment. Later periods of underpayment for that payment
period shall be from the day after the due date for the payment period to the
date of the next applied payment or April 15 of the following year, whichever
is earlier.
(c) To determine the interest for a payment period with
more than one period of underpayment, interest shall be computed separately for
each of the periods of underpayment using the number of days in each period of
underpayment, the correct underpayment balance, and the appropriate interest
rates.
History Note: Authority G.S. 105‑163.15; 105‑262;
Eff. June 1, 1990;
Amended Eff. May 1, 2006; June 1, 1993;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. July 26, 2015.
17 NCAC 06D .0211 FARMERS AND FISHERMEN
History Note: Authority G.S. 105‑163.15; 105‑163.18;
105‑262;
Eff. June 1, 1990;
Repealed Eff. June 1, 1993.
