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RPD-41272 (2013)

New Mexico Taxation and Revenue Department

Rev. 12/13/2013

2013 Calculation of Estimated Personal Income Tax Underpayment Penalty

Instructions

income varies and you are required to file estimated pay-

Section II. Calculate your required annual payment as de-

ments beginning with the 2nd, 3rd, or 4th quarter due date.

scribed in lines 2 to 7. Line 7 shows your required annual

payment

Exception for farmers and ranchers. The law provides a

Section III. These are the instructions for lines 12 and 13

special rule, identical to the federal rule, for farmers and

in Section IV. For line 12, use instructions 8, 9, and 10 to

ranchers who expect to receive at least 2/3 of their gross

calculate the amount of the estimated tax payments you

income from farming or ranching, or who received at least

owe on different dates. For line 13, use instruction 11 to

2/3 of their gross income from farming or ranching in the

show the total withholding tax and estimated taxes you paid.

prior year.

Section IV. After completing lines 12 and 13 for all four

Farmers and ranchers who meet the gross income test may:

columns, go to column a and complete lines 17, 19, and 20.

• Make one estimated payment in the amount of the re-

Then go to columns b and c and complete lines 14 to 20. In

quired annual payment on or before January 15 of the

column d, complete lines 14 to 17, 19, and 20.

year following the tax year of the return, or

• File and pay taxes in full on or before March 1 of the year

Section V. Calculate your penalty payment for each quarter

following the tax year of the return.

in a separate column as described in lines 21 to 34. You

may attach a spreadsheet formatted the same as Section

For joint returns, the farmer or rancher must count the

V. If you have multiple payments for any quarter, split the

spouse’s gross income to determine whether the couple

column for the quarter into the number of payments to

meets the two-thirds-of-gross income test.

show the different calculations. When completing line 21

for subsequent columns in the same quarter, subtract the

Enter 5 if you are a farmer or rancher and meet these

previous payment(s) for the quarter from the underpayment

requirements. Even if you do not owe an underpayment

of estimated tax for the quarter (line 19, Section IV). Line

penalty because you filed and paid the tax in full on or be-

34 shows your total penalty on underpayment of estimated

fore March 1 of the year following the tax year of the return,

income tax.

make this entry.

HOW INSTALLMENT PAYMENTS ARE APPLIED

HOW MUCH DO YOU NEED TO PAY?

The Department credits a payment of estimated tax against

To calculate your estimated tax, start with the required an-

unpaid or underpaid installments in the order in which the

nual payment or the total amount of estimated tax to pay

installment is required to be paid. Therefore, an installment

during the tax year. Then determine the amount and due

payment is applied first to the earliest installment payment

date for each estimated tax payment.

due and any balance due on a prior underpaid installment.

Line 19, Section IV shows the underpayment.

The required annual payment is the lesser of:

• 90% of the tax on the current year’s return (or, if no return

PENALTY TIME FRAMES

is filed, the tax for the taxable year), or

The penalty for underpayment or non-payment of estimated

• 100% of the tax on the prior year’s return, if you filed a

tax is based on the difference between the estimated tax

return during the prior year for a full 12-month year.

payment and the actual amount of estimated tax due.

Penalty accumulates from the due date of the estimated

NOTE: Always use the instructions specifically written

tax payment until the earlier of:

for the tax year you are filing. The line numbers and the

• The date the payment is made, or

calculation of estimated tax may change from year to year.

• T he 15th day of the fourth month following the close of

the tax year.

HOW TO COMPLETE THIS FORM

If have an exception and you want the Department to calcu-

PENALTY BASED ON INTEREST RATES

late the penalty for you, complete Sections I through IV and

New Mexico calculates penalty in the form of interest on un-

mark the box at the top of page 3. If you want to calculate

derpayment of estimated tax. The penalty is calculated at the

the penalty yourself, also complete Section V.

annual rate established each quarter for individual income

tax purposes under the U.S. Internal Revenue Code (IRC).

Section I. If you qualify for one of the exception methods,

IRC rate changes quarterly. The Internal Revenue Service

mark the appropriate box.

announces the IRC rate for each quarter in the last month of

the previous quarter. The annual rates for the past two years

Page 5 of 6

Form Rpd-41272 - Calculation Of Estimated Personal Income Tax Underpayment Penalty - 2013 Page 5

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