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2006 INSTRUCTIONS FOR SC2210

PURPOSE OF FORM. Every taxpayer is required to prepay each year's tax by withholding or estimating tax payments. If you are an

individual taxpayer, other than a qualified farmer or fisherman, and line 14, SC1040 or line 13, SC1041 is $100 or more, use this form to

find out if you paid enough income tax during the year. If you did not pay enough, you may have to pay a penalty on the amount of your

underpayment.

FARMERS AND FISHERMEN.

f you meet both tests 1 and 2 below, you will not have to pay a penalty for underpaying estimated tax:

1. Your gross income from farming and fishing is at least two-thirds of your annual gross income from all sources for 2005 or 2006; and

2. You filed SC1040 and paid the entire tax due by March 1, 2007.

If you meet this test, write the word "farmer" or "fisherman", whichever the case, on line 8. Attach this form to your tax return.

EXCEPTIONS TO THE PENALTY. You will not have to pay the penalty if either of the two following situations applies:

1. You had no tax liability for 2005, and you were a South Carolina resident for the entire year, and your 2005 tax return was (or would

have been had you been required to file) for a full 12 months; or

2. The total tax shown on your 2006 return less the amount of tax you paid through withholding is less than $100. To determine whether

the total tax is less than $100, complete lines 1 through 6.

WHO MUST PAY THE UNDERPAYMENT PENALTY.

In general, you may owe the penalty for 2006 if you did not pay at least the

smaller of:

1. 90% of your 2006 tax liability or

2. 100% of the tax shown on your 2005 tax return. However, if your adjusted gross income is more than $150,000, the 100% rule is

modified to be 110% of the tax shown on your 2005 tax return. The penalty is figured separately for each installment due date.

Therefore, you may owe the penalty for an earlier due date, even if you paid enough tax later to make up the underpayment. This is

true even if you are due a refund when you file your tax return.

ANNUALIZED INCOME INSTALLMENT METHOD. If your income varied during the year due to the seasonal nature of your business, or

for other reasons, you may be able to lower the amount of your required installment for the due dates by using the Annualized Income

Method. To use this method to figure your required installments, complete Schedule AI of federal Form 2210 for South Carolina purposes.

Write the word " annualized" to the left of line 17 to indicate use of this method, and attach a copy of the Federal Schedule AI for South

Carolina. Print the word "waiver" in the penalty box on the front of SC1040, line 30.

WAIVER OF PENALTY. If you have an underpayment on line 13 (line 24 if you use the regular method), all or part of the penalty for that

underpayment may be waived if any of the following applies:

An underpayment was due to a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the

penalty.

In 2005 or 2006, you retired after age 62 or became disabled and your underpayment was due to reasonable cause.

A taxpayer will be granted a waiver of the portion of an underpayment of estimated income tax penalty attributed to personal

service income earned in another state on which income tax due the other state was withheld.

To claim any of the above waivers, check box A or B. Complete the entire form through line 15 (line 29 if you use the regular method)

without regard to the waiver provision. Write the amount to be waived in brackets in the margin to the left of line 16 (line 30 for the regular

method). Subtract the amount to be waived from the total penalty without regard to the waiver and enter the result on line 16 (line 30 for

the regular method). Attach a statement explaining the reason for the waiver. Print the word "waiver" in the penalty box on the front of

SC1040, line 30.

HOW TO FIGURE YOUR UNDERPAYMENT (REGULAR METHOD). The underpayment of any installment is the difference between the

amount of your required installment and any payments you made by the due date of the installment. Payments are applied to any prior

underpayment before being applied to the current installment. Income taxes withheld from your salary, pension or winnings are

considered payments of estimated tax in equal installments on the four installment dates, unless you prove otherwise.

PERIOD OF UNDERPAYMENT (REGULAR METHOD). The penalty is applied to the number of days that the installment was not paid.

You figure the period of the underpayment by counting the number of days after the due date of the installment to and including the date

of payment or the end of the rate period (6/30/06 or 4/15/07), whichever is earlier

If you are a calendar year taxpayer, payments were due on April 15, June 15 and September 15, 2006, and January 15, 2007. Payment

of your entire 2006 estimated tax liability, or any balance due by January 15, 2007, or the filing of your 2006 income tax return and

payment of the tax shown on the return by January 31, 2007, will not relieve you of the penalty if you did not pay the estimated income tax

due earlier in your tax year. If you file your return and pay the tax due by January 31, 2007, you will have no penalty for the installment

due January 15, 2007, and the periods of underpayment for earlier installments will end on January 15, 2007.

Social Security Privacy Act Disclosure

It is mandatory that you provide your social security number on this tax form. 42 U.S.C 405(c)(2)(C)(i) permits a state to use an

individual's social security number as means of identification in administration of any tax. SC Regulation 117-201 mandates that any

person required to make a return to the SC Department of Revenue shall provide identifying numbers, as prescribed, for securing

proper identification. Your social security number is used for identification purposes.

30984017

Form Sc2210 - Fillable Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - Instructions - 2006

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