Form Rpd-41272 12 - Calculation Of Estimated Personal Income Tax Underpayment Penalty - State Of New Mexico Taxation And Revenue Department - 2012 Page 5
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5RPD-41272 12
Rev. 12/3/2012
New Mexico Taxation and Revenue Department
2012 Calculation of Estimated Personal Income Tax Underpayment Penalty
Instructions
Page 2 of 2
Department’s web site, one of the Department’s district offices,
HOW TO CALCULATE THE PENALTY FOR UNDERPAY-
or from your tax return preparation software. Ensure that your
MENT OR NONPAYMENT OF ESTIMATED PERSONAL
form indicates the correct tax year on the PIT-ES. To ensure
INCOME TAX.
your payment is applied to correctly, the form must indicate the
Underpayment or nonpayment of estimated tax is subject to
correct tax year which you wish to make an estimated payment.
penalty on the difference between the estimated tax payment
For example, if you are making an estimated payment for your
and the actual amount of estimated tax due. Penalty accumu-
2012 tax return due in 2013, make certain that your PIT-ES form
lates from the due date of the estimated tax payment until the
indicates the 2012 tax year. Write your social security number
earlier of:
and the tax year of the return to which the payment applies
•
the date the payment is made, or
on the check or money order. Make the payment payable to
•
the 15th day of the fourth month following the close of the
New Mexico Taxation and Revenue Department and mail with
tax year.
Form PIT-ES to:
New Mexico calculates penalty (in the form of interest) on
underpayment of estimated tax at the annual rate established
New Mexico Taxation and Revenue Department
each quarter for individual income tax purposes under the
P.O. Box 8390
U.S. Internal Revenue Code (IRC). Penalty is computed on a
Santa Fe, NM 87504-8390
daily basis for each day the payment is late. The formula for
calculating penalty is:
ALTERNATIVE METHODS FOR CALCULATION OF ES-
TIMATED PERSONAL INCOME TAX.
Underpay- X number of days late
X effective annual
Annualized income. Taxpayers with seasonal income can
ment due
total days in the year
interest rate
use a modified annualization method to determine the amount
for the quarter
and timing of their estimated payments. If a taxpayer does not
Beginning January 1, 2008, the interest rate is reduced to the
have annualized income based on actual income received
annual rate established each quarter for individual income tax
through March 31 sufficient to require a payment, no payment
purposes under the U.S. Internal Revenue Code (IRC). The
is required. The test dates for subsequent payments are May
IRC rate for each three-month period is announced by the IRS
31, August 31 and December 31. Based on actual income
in the last month of the previous quarter. The annual rate for
received, if a taxpayer is not required to make a payment for
each quarter will be updated as the information is released. The
a specific period, the taxpayer may have to make up later in
annual and daily interest rates for the each quarter will also be
the year for not paying the earlier installment. See Publication
posted on the Department’s web site.
FYI-320, PIT-ES: Personal Income Estimated Tax Payments,
No penalty applies to the fourth estimated payment if the tax-
for more information on how to compute Annualized Income.
payer files a return and pays the entire amount on or before
Farmers and Ranchers. The law provides a special rule,
January 31 of the following year.
identical to the federal rule, for farmers and ranchers who
If the balance due is $1,000 or more, the Department first de-
expect to receive at least two-thirds of their GROSS income
termines if the required annual payment was made in timely
from farming or ranching, or who received at least two-thirds of
installments. If it was not, the Department calculates the un-
their GROSS income from farming or ranching in the prior year.
derpayment penalty and issues an assessment. If you believe
Farmers and ranchers who meet the gross income test may:
an assessment is in error, you can protest the assessment and
1) make one estimated payment in the amount of the
provide more information.
“required annual payment” on or before January 15 of
the year following the tax year of the return, or
NOTE: A special rule applies for computing the underpayment
2) file and pay in full on or before March 1 of the year
penalty for personal estimated income tax. The interest rate that
following the tax year of the return.
applies to the 1st quarter following the tax year also applies to
On joint returns the farmer or rancher must consider the
the 1st 15 days of the 4th month (April) following the tax year.
spouse’s gross income in determining whether the two-thirds-
of-gross-income test is met.
HOW TO PAY AN ESTIMATED INSTALLMENT PAYMENT.
You may pay through the Department’s web site at
Individuals who wish to compute estimated installment
newmexico.gov. Click on “Online Services”. You may pay by
payments based on the actual dates on which all amounts
electronic check at no charge. An electronic check authorizes
of withholding tax were withheld for the applicable tax
the Department to debit your checking account in the amount
year. The New Mexico income tax deducted and withheld by
you specify. You may also make tax payments via credit card.
an employer is a payment of estimated tax. An equal amount
A convenience fee of 2.49% is required to use this service.
of the tax withheld shall be considered as paid on each install-
The fee reimburses the state for fees charged by the credit
ment due date unless the taxpayer establishes the dates on
card company.
which all amounts were actually withheld. This provision may
To make an estimated installment payment by check, obtain
be applied separately to wage and pension withholding and
the PIT-ES Form from your personal income tax packet, the
other amounts withheld under the Withholding Tax Act.
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