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TABLE 4

Determine if You Need To Make More Computations

Payments after 12/31/01 through 4/15/02

Use the following information to see if you need to make

(a)

(b)

more computations.

Date

Payments

The payment listed in the table reduced

the

underpayment to zero. You do not need to make any

further computations for column (a). Calculate the

penalty for any other underpayments shown in columns

(b) through (d) of line 13.

List only the payments made during the dates shown in the

You did not list any payments in the table. You will

table heading. Apply the following rules.

need to calculate the penalty for rate periods 2, 3, and 4.

If you have any withheld Arizona income tax, the

To do this, complete column (a) of lines 18, 19, 21, 22,

department considers you to have paid ¼ of these

24, and 25.

amounts on each payment due date. You may treat these

The payment listed in the table did not reduce the

amounts paid on a different due date if you can show

underpayment to zero, and no other payments are listed.

otherwise.

Make another computation on lines 18, 19, 21, 22, 24,

For example, if you had $4,000 of Arizona income tax

and 25 to calculate the penalty on the underpayment

withheld during the 2001, list $1,000 as being paid on

balance that remained unpaid for the entire rate period.

June 15, 2001, September 17, 2001, and January 15,

In this case, enter another number in the entry space for

2002, in the proper table. Do not list the withholding

lines 15 and 16, as follows:

attributable to the first payment due date April 16, 2001.

On line 15, enter "75". This is the total number of days

List any amount that you pay with your tax return as a

in the first rate period (see the chart above).

payment. Use the date you file your return as the

On line 16, make the computation and enter the result.

payment date, unless you file late. In that case, use April

The "underpayment" in this computation is the balance

15, 2002.

of the underpayment remaining in the period.

Chart of Total Days per Period

Other payments are listed in the table and the first

payment was not enough to reduce the underpayment to

If an underpayment remained unpaid for an entire period, use

zero. Make a separate computation for each payment

the chart below to determine the number of days to enter on

listed until the underpayment is reduced to zero. If there

line 15, columns (a) and (b), line 18, columns (a), (b), and

is still an underpayment balance after applying all of the

(c), line 21, columns (a), (b), and (c), and line 24 columns

payments, you will need to calculate the penalty on the

(a), (b), (c), and (d).

balance of the underpayment in the same manner as

Rate

(a)

(b)

(c)

(d)

explained in number 2 above.

Period

1 (line 15 )

Rate Period 2

2 (line 18)

3 (line 21)

If an underpayment balance remains after applying any

4 (line 24)

105

payments in Table 1, compute the penalty attributable to that

balance on lines 18 and 19. Use the same steps as explained

For example, if you have an underpayment on line 13, column

under Rate Period 1 above, but use the date and interest rate

(a), but show no payments, you would enter "75" on line 15.

shown on lines 18 and 19. Be sure to use only the payments

Rate Period 1

listed in Table 2.

Enter on line 15 the number of days from 4/16/01 to the date

NOTE: Penalty compounds annually on January 1 of each

of the first payment listed in Table 1. If no payments are

year. Add any penalty outstanding on that date to the

listed, enter "75".

principal amount of the tax (installment underpayment/late

payment). The amount added to the principal becomes a

If You Listed a Payment in Table 1

part of the principal and accrues penalty until paid.

On a separate sheet of paper apply the payment to the

underpayment shown on line 13. The underpayment for the

Line 28 –

computation on line 16 is the amount of the payment applied to

the line 13 underpayment. If the payment is more than the

Total penalty on underpaid or late paid estimated payments.

underpayment, apply only an amount equal to the underpayment

Add the amounts in columns (a), (b), (c), and (d), line 27.

and use that amount for the line 16 computation.

Enter the result. Also enter this amount on Form 140, page

If You Did Not List Any Payments in Table 1

1, line 52, or Form 140PY, page 1, line 54, or Form 140NR.

Page 1, line 52.

The underpayment is the whole underpayment balance since

the entire underpayment was unpaid for the whole rate

period.

Instructions For Arizona Form 221 - Underpayment Of Estimated Tax By Individuals - 2001 Page 4

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