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RPD-41272 (2014)

New Mexico Taxation and Revenue Department

Rev. 12/31/2014

2014 Calculation of Estimated Personal Income Tax Underpayment Penalty

Instructions

income varies and you are required to file estimated pay-

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

Section II. Calculate your required annual payment as de-

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

Exception for farmers and ranchers. The law provides a

payment

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

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

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

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

income from farming or ranching, or who received at least

calculate the amount of the estimated tax payments you

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

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

prior year.

show the total withholding tax and estimated taxes you paid.

Farmers and ranchers who meet the gross income test may:

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

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

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

quired annual payment on or before January 15 of the

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

year following the tax year of the return, or

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

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

following the tax year of the return.

Requesting the Department to Calculate the Penalty.

Mark the box at the top of the page of Section V, if you want

For joint returns, the farmer or rancher must count the

the Department to calculate the penalty on underpayment of

spouse’s gross income to determine whether the couple

estimated personal income tax that you owe. If you mark the

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

box, you do not need to complete Section V or VI. However

you must complete Sections I through IV, or the Department

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

cannot calculate your penalty using an exception method.

requirements. Even if you do not owe an underpayment

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

Sections V and VI. Calculate your penalty payment for each

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

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

make this entry.

At the top of the column indicate the Quarter (1, 2, 3 or 4) in

which an underpayment occured from line 19, Section IV.

HOW MUCH DO YOU NEED TO PAY?

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

Multiple Payments For a Quarter

nual payment or the total amount of estimated tax to pay

If you have multiple late payments for any quarter, add ex-

during the tax year. Then determine the amount and due

tra columns for the quarter. For example, if you made two

date for each estimated tax payment.

payments after the first quarter payment was due, use the

first two columns, a and b, and enter 1 next to “Quarter” at

The required annual payment is the lesser of:

the top of each column. Calculate each late payment for a

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

quarter in a separate column. For additional columns, use

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

Section VI.

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

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

When completing line 21 for subsequent columns in the

same quarter, subtract the previous payment(s) for the quar-

NOTE: Always use the instructions specifically written

ter from the underpayment of estimated tax for the quarter

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

(line 19, Section IV). In Section V, line 34 enter your total

calculation of estimated tax may change from year to year.

penalty on underpayment of estimated income tax.

HOW TO COMPLETE THIS FORM

HOW INSTALLMENT PAYMENTS ARE APPLIED

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

The Department credits a payment of estimated tax against

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

unpaid or underpaid installments in the order in which the

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

installment is required to be paid. Therefore, an installment

the penalty yourself, also complete Section V, and if ap-

payment is applied first to the earliest installment payment

plicable, Section VI.

due. Any balance is applied to the next installment pay-

ment due.

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

mark the appropriate box.

PENALTY TIME FRAMES

The penalty for underpayment or non-payment of estimated

Page 6 of 7

Form Rpd-41272 - New Mexico Calculation Of Estimated Personal Income Tax Underpayment Penalty - 2014 Page 6

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