Instructions For Underpayment Of Estimated Tax - Minnesota Department Of Revenue


Instructions for Underpayment of Estimated Tax
This schedule is not required if you are filing your first Minnesota tax return
Figuring the underpayment
To determine the amount of each
A unitary group is considered a large
required installment for a short taxable
corporation if the combined Minnesota
Line 1
year, divide the amount on line 3 by the
taxable net income of its members was
Fill in your 1998 tax from Form M4, line
number of installments due.
$1 million or more in any of the three tax
1, less any enterprise zone credit listed
years immediately preceding the current
Alternative methods
on Form M4, line 4.
S corporation filers: The additional
If your income varied during the year,
A large corporation must use 100 percent
charge is computed separately for the S
there are two alternative methods of
of its current year’s tax liability as its
corporation taxes/minimum fee (Form
determining the required installment:
required annual payment.
M-3S-4, lines 13 and 14) and for the
• the Annualized Income Installment
composite income tax (Form M-3S-4, line
For the first quarter only, the installment
Method, and
15). See the M-3S-4 instructions for
may be based on a required annual
• the Adjusted Seasonal Installment
further details.
payment equal to 100 percent of the prior
year’s tax liability. Any resulting
Line 2
To use one or both of these methods to
reduction in the installment must be
Fill in your 1997 tax from your 1997
figure one or more required install-
added to the second quarter installment.
Form M-4, line 19, less any enterprise
ments, complete Schedule A of federal
The second, third and fourth install-
zone credit listed on your 1997 Form M4,
Form 2220.
ments must be based on a required
line 22.
Fill in your Minnesota annualization
annual payment equal to 100 percent of
Unitary filers: If you filed separate
periods on line 1 of the federal schedule.
the current year’s tax liability unless an
returns using the combined income
In column (a), fill in “2.” In column (b),
alternative method is used for any
method last year, fill in the sum of the
fill in either “2” or “5.” In column (c), fill
installment (see previous column).
prior year’s tax liability (less any
in either “6” or “8.” In column (d), fill in
Line 6
enterprise zone credit) for all corpora-
either “9” or “11.”
tions included in the unitary group.
In the first column, list payments made
On line 2, fill in your Minnesota taxable
by the 15th day of the third month of the
S corporation filers: Fill in your 1997
income for the periods you filled in on
tax year. Include any overpayment from
S corporation taxes/minimum fee, or the
line 1.
your 1997 return that was credited to
individual shareholder’s share of
For line 3:
your 1998 estimated tax account. For
composite income, whichever applies for
If your annualization
Your annualization
each of the other columns, list payments
this schedule. Subtract from those
period on line 1 is:
amount is:
made after the previous column’s due
amounts the pro rata amount of any
date and by that column’s due date
enterprise zone credit listed on your
shown on line 4.
1997 Form M-3S-4, line 19.
Computing the additional charge
Line 3
Lines 14 through 17
Fill in the lesser of line 1 or line 2. You
must fill in the amount from line 1 if:
Payments of estimated tax are applied
against any underpayments of required
• you did not file a 1997 return,
Column (a) of lines 14a, 14b, 14c and 15
installments in the order that the
• your return for the preceding tax year
should include income for the first two
installments were due.
did not cover a full 12-month period,
months of each tax year. Column (a) of
For example, if your first quarter
lines 16a, 16b and 16c should include
installment is underpaid by $100 and
income for the first three months of each
• your 1997 return showed no tax
you deposit $200 for your second quarter
tax year.
installment, $100 of your second quarter
Line 4
Use a flat, regular tax rate of 9.8 percent
payment is applied to the first quarter.
on lines 5 and 23, and an alternative
The additional charge for the first
The due dates of the installments are the
minimum tax rate of 5.8 percent on lines
quarter is computed from the first
15th day of the third, sixth, ninth and
6 and 30.
quarter due date to the date the second
12th months of the taxable year.
quarter payment is made.
Attach the federal schedule to this
If you have a short taxable year, the
schedule if an alternative method is used
Also, the second quarter installment will
installments are due on the 15th day of
for any installment.
then be underpaid by $100 (assuming
the third, sixth ninth and final months.
that the second quarter payment is $200)
Large corporations
No installment is required for a short
until sufficient repayments are received
taxable year of less than four months.
A corporation is considered a large
to eliminate the underpayment.
Line 5
corporation if it had Minnesota taxable
If more than one payment has been made
net income (after apportionment) of $1
Your required installment is 25 percent
for a required installment, attach a
million or more in any of the three tax
of the amount on line 3 unless you use
separate computation for each payment.
years immediately preceding the current
an alternative method (see below). Large
corporations, see special instructions
under “Large corporations.”


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