Schedule Est - Additional Charge For Underpayment Of Estimated Tax - 2016 Page 3
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32016 Schedule EST Instructions
Additional Charge for Underpayment of Estimated Tax for Trusts (Form M2), Partnerships (Form M3) and
S Corporations (Form M8)
This schedule is not required if you
Line Instructions
You may benefit from using the annual-
ized income installment method if your
These instructions refer to your original
are filing your first Minnesota tax
income varied throughout the year or if you
return. However, an amended return is con-
return.
sidered the original return if it is filed by the
had a late capital gain or higher 4th quar-
regular due date of the original return.
ter income. If you use this method for one
Who Must File
payment due date, you must use it for all.
If you are a trust, partnership or S corpora-
Line 2 — 2015 Withholding and Credits
Complete the worksheet on form ESTa. ”
tion, use this schedule to determine if you
Trusts: Add lines 15b through 15f of your
owe an additional charge for underpaying
2015 Form M2.
Line 14
estimated tax. (Decedent estates are not
For each payment period, enter the total
Partnerships: Add lines 5 and 7 of your 2016
subject to the additional charge.)
amount of:
Form M3.
You may owe an additional charge if:
• estimated payments you paid for each pay-
S corporations: Add lines 6 and 10 of your
ment period;
• you did not pay the correct amount of
2016 Form M8.
• Minnesota income tax withheld in 2016;
estimated tax by the due dates, even if you
• your 2015 income tax refund, if you
expect to receive a refund; or
Optional Short Method or
elected on your 2015 Minnesota return
• your Minnesota tax liability for the cur-
Regular Method
to apply all or a portion of your refund to
rent year, less any credits, is $500 or more.
You may use the optional short method only if:
your 2016 estimated tax; and
• any refundable credits you claim for 2016.
Exception. You are not subject to an addi-
• you did not make any estimated tax pay-
tional charge for underpayment of estimated
ments; OR
You are considered to have received any
tax if this is the first year you are filing a
• you paid your 2016 estimated tax in four
refundable credits evenly during the year un-
Minnesota tax return.
equal amounts on or before the due date of
less you show otherwise. Your 2016 refund,
each installment.
if any, is considered a credit to your first
Avoiding the Additional Charge
payment period.
Note: If any payment was made before the
To avoid an additional charge for underpay-
installment due date, it is best to use the
ment of estimated tax, you must make the
Lines 15 and 16
regular method. Using the short method will
required estimated tax payments on time
Compare line 13 of each column to line 14 of
cause you to pay a larger additional charge
and pay the lesser of:
the same column.
than the regular method. If the payment was
• 90 percent of your current year’s original
only a few days early, the difference is likely
If line 14 is more than line 13, you have
tax liability, less any credits; or
to be small.
an overpayment for the payment period.
• 100 percent of your prior year’s total tax
Subtract line 13 from line 14 and enter the
Continue with line 7 to use the optional
liability, less any credit. However, if your
result on line 15.
short method, and skip lines 13-22.
Minnesota assignable gross income on
Add line 15 to the credit on line 14 of the
your 2015 Form M2 is more than $150,000,
If you are not eligible or you choose not
you must use 110 percent of your previous
next column. Overpayments in any quarter
to use the optional short method, use the
year’s tax liability instead of 100 percent.
following an underpayment must first be ap-
regular method to determine your additional
plied to making up previous underpayments.
charge. Skip lines 7–12 and continue with
Fiscal Year Taxpayers
line 13.
If line 14 is less than line 13, you have
If you file your Minnesota return on a fiscal
an underpayment for that payment period.
year basis, change the payment due dates to
Optional Short Method
Subtract line 14 from line 13 and enter the
the 15th day of the fourth, sixth and ninth
result on line 16. Continue with line 17.
Line 7
months of your fiscal year, and the first
Enter the total amount of 2016 estimated tax
month of your next fiscal year.
Line 17
payments you made in 2016 and 2017. Do
If you have an underpayment in all four
Short Taxable Year
not include any other amounts on line 7.
quarters, in each column enter the date you
If you have a short taxable year, the install-
filed your return or the regular due date for
Regular Method
ments are due on the 15th day of the third,
filing your return, whichever is earlier.
sixth, ninth and final months. No installment
Complete column A, lines 13–16. Then,
is required for a short taxable year of fewer
depending on whether you have an underpay-
Otherwise, enter the date when the under-
than four months.
ment or an overpayment, either continue with
payment on line 16 was paid in full.
line 17 of column A (underpayment) or line
Example: You made your first quarter esti-
13 of column B (overpayment).
mated tax payment on April 20, but you show
Line 13
an underpayment on line 16. On June 14, you
Enter 25 percent (.25) of line 6 in each of the
paid your second quarter payment in full and
four columns on line 13.
included the underpayment from the first
quarter. On line 17, you would enter June 14
in the first and second quarter columns.
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