Form Ar2210 - Arkansas Penalty For Underpayment Of Estimated Tax - 2013 Page 2
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1
2Estimated Income Tax Penalty
1. (a) Every taxpayer subject to the tax levied by the Arkansas Income Tax
PENALTY COMPUTATION EXAMPLE
Act shall make and file with the Commissioner a declaration of the es-
timated tax for the income year if the taxpayer can reasonably expect
The underpayment of estimated tax shall be computed as follows: The number
the estimated tax to be $1,000 or more and income tax withholdings
of days from the due date of the quarterly payment to the date payment is
for the income year do not equal 90% of the estimated tax.
actually made divided by 365, times ten percent (10%), times the amount of
No penalty shall be imposed for a tax year if the tax shown on the
underpayment.
return for such tax year is less than $1,000, or where the original
amount of estimated tax is the same amount shown to be due by the
EXAMPLE:
(1)
Tax Liability
$5,000
return of the taxpayer for the preceding income year where such return
(2)
90% of Tax Liability
$4,500
showing a liability for tax was filed by the taxpayer for the preceding
(3)
Payments
$2,000
income year of twelve (12) months.
(4)
Line (1) less Line (3)
$3,000
(b) The declaration of estimated tax shall be made on such forms and
(5)
Prior Year Tax Liability
$3,000
shall include such information as the Commissioner shall prescribe.
(6)
Required Annual Payment
$3,000
Individual forms can be obtained by calling (501) 682-1100 or from
[Lesser of (2) or (5)]
our website
(c)
The declaration, with the first payment, must be filed with the Commis-
Note:
Payments reported on Line (3) shall be deemed to have been
sioner on or before the fifteenth (15
) day of the fourth (4
) month of
th
th
paid in four (4) equal payments on the quarterly due dates.
the income year of the taxpayer. The remaining filings and payments
are due on the fifteenth (15
) day of the sixth (6
) month, ninth (9
)
th
th
th
Required Installments ............................. $3,000 divided by 4 = $750
month, and first (1
) month after the close of the income year.
st
Payments................................................ $2,000 divided by 4 = $500
(d) A taxpayer who, due to change of circumstances, first meets the
requirements for filing a declaration after the fifteenth (15
) day of the
th
Column (a)
4-15-13
Required Installment
$750
fourth (4
) month of the income year, shall make and file the declara-
th
Payment 4-15-13
$500
tion on or before the next regular quarterly tax payment date.
Underpayment
$250
2. (a) A taxpayer who makes a declaration of estimated tax for the income
Paid 6-15-13
($250)
year shall estimate an amount not less than ninety percent (90%) of
-0-
the amount actually due.
4-15-13 to 6-15-13 = 61 days
(b)
If a taxpayer fails to make a declaration of estimated tax and pay on the
61/365 X .10 X $250 = $4
quarterly due date the equivalent to at least ninety percent (90%) of the
amount actually due, a penalty of ten percent (10%) per annum shall be
Column (b)
6-15-13
Required Installment
$750
added to the amount of the underestimate. The ten percent (10%) per
Payment 6-15-13
$500
annum penalty will be applied on a quarterly basis. A taxpayer who has
Used 4-15-13
($250)
($250)
an uneven income may compute the ten percent (10%) penalty on an
Underpayment
$500
annualized basis. The underestimate penalty is computed on the lesser
Paid 9-15-13
($500)
of the current year’s tax liability or the previous year’s tax liability.
-0-
3. (a) The penalty provided in ACA §26-18-208 (Supp. 1997) for failure
6-15-13 to 9-15-13 = 92 days
to make correct payments of estimated income tax shall not apply
92/365 X .10 x $500 = $13
to the exceptions noted hereafter.
Column (c)
9-15-13
Required Installment
$750
EXCEPTIONS
Payment 9-15-13
$500
1. Taxpayers whose income from farming for the income year can reasonably
Used 6-15-13
($500)
–0-
Underpayment
($750)
be expected to amount to at least two thirds (2/3) of the total gross income
from all sources for the income year, may file such declaration and pay
Paid 1-15-14
$500
the estimated tax on or before the fifteenth (15
) day of the second (2
)
Paid 4-15-14
$250
($750)
th
nd
month after the close of the income year. In lieu of filing any declaration,
-0-
you may file an income tax return and pay the tax on or before the fifteenth
9-15-13 to 1-15-14 = 122 days
122/365 X .10 X $500 = $17
(15
) day of the third (3
) month after the close of the income year.
th
rd
2. In lieu of filing the fourth (4
9-15-13 to 4-15-14 = 212 days
) quarter installment the taxpayer may file an
th
212/365 X .10 X $250 = $15
income tax return and pay the tax on or before January 31 or on the last
day of the first (1
) month after the close of the income year.
st
3. No penalty shall be imposed for a tax year if:
Column (d)
1-15-14
Required Installment
$750
(a) the preceding tax year was a tax year of twelve (12) months, and
Payment
$500
(b) the taxpayer did not have a tax liability for the preceding tax year and,
Used 9-15-13
($500)
-0-
(c) the taxpayer was a resident of Arkansas throughout the preceding
Underpayment
$750
tax year.
Paid 4-15-14
($750)
4. No penalty shall be imposed with respect to any underpayment if the Com-
-0-
missioner of Revenue determines that by reasons of casualty, disaster,
1-15-14 to 4-15-14 = 90 days
90/365 X .10 x $750 = $18
or other unusual circumstances the imposition of such penalty would be
against equity and good conscience.
5. No penalty shall be imposed with respect to any underestimate or under-
First Quarter Penalty ........................ $ 4
Second Quarter Penalty .................... 13
payment if the Commissioner determines that:
Third Quarter Penalty ........................ 32
(a) the taxpayer
(i) retired after having attained age 62, or
Fourth Quarter Penalty ...................... 18
Total Penalty ................................... $67
(ii) became disabled in the tax year for which such estimated pay-
ments were required to be made or in the tax year preceding
such tax year, and
(b) such underpayment was due to reasonable cause and not to willful
neglect.
6.
Taxpayers with varied income may benefit by computing the ten percent
(10%) penalty on an annualized basis. The penalty is computed using
Form AR2210A which must be submitted with Form AR1000F/AR1000NR
or Form AR1002F/AR1002NR. If penalty computed using Form AR2210A,
write “6” on Form AR1000F/AR1000NR, Box 50A or Form AR1002F/
AR1002NR, Box 37A.
AR2210 Instr. (R 6/12/13)
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