Failure by Taxpayer to Pay Estimated Income Tax

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Current Income Tax Payment
  6. Failure by Taxpayer to Pay Estimated Income Tax

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  1. Addition to the tax. In case of any underpayment of estimated tax by a taxpayer, except as provided in subsection (d) of this Code section, an amount computed at the rate of 9 percent per annum upon the amount of the underpayment, determined under subsection (b) of this Code section, for the period of the underpayment, determined under subsection (c) of this Code section, shall be added to the tax under Code Section 48-7-21 for the taxable year.
  2. Amount of underpayment. For purposes of subsection (a) of this Code section, the amount of the underpayment shall be the lesser of the excess of paragraph (1) or paragraph (2) of this subsection over paragraph (3) of this subsection when those paragraphs are as follows:
    1. The amount of the installment required to be paid if the estimated tax were equal to 70 percent (66 2/3 percent in the case of individuals referred to in subsection (b) of Code Section 48-7-115, relating to income from farming and fishing) of the tax shown on the return for the taxable year or, if no return was filed, 70 percent (66 2/3 percent in the case of individuals referred to in subsection (b) of Code Section 48-7-115, relating to income from farming and fishing) of the tax for the year;
    2. The amount of the installment required to be paid if the estimated tax were equal to 100 percent of the tax shown on the return for the preceding taxable year, as long as the preceding taxable year was a taxable year of 12 months, and a tax return was filed for such preceding taxable year; and
    3. Any amount of the installment paid on or before the last date prescribed for payment.
  3. Period of underpayment. The period of the underpayment shall run from the date the installment was required to be paid to whichever of the following dates is the earlier:
    1. The fifteenth day of the fourth month following the close of the taxable year; or
    2. With respect to any portion of the underpayment, the date on which the portion is paid. For the purposes of this paragraph, a payment of estimated tax on the installment date or, in the case of a corporation, on the fifteenth day of the first month of the succeeding taxable year shall be considered a payment of any previous underpayment only to the extent the payment exceeds the amount of the installment determined under paragraph (1) of subsection (b) of this Code section for the installment date or, in the case of a corporation, for the fifteenth day of the first month of the succeeding taxable year.
  4. Exception. Notwithstanding subsections (a) through (c) of this Code section, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds the amount which would have been required to be paid on or before the last date prescribed for the payment if the estimated tax were the least of the following:
    1. The tax shown on the return for the preceding taxable year, if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and the preceding year was a taxable year of 12 months;
    2. An amount equal to the tax computed at the rates applicable to the taxable year on the basis of the taxpayer's status with respect to Code Section 48-7-26 for the taxable year, but otherwise on the basis of the facts shown on the return of the taxpayer for, and under the law applicable to, the preceding taxable year; or
    3. An amount equal to 70 percent, or 66 2/3 percent in the case of individuals referred to in subsection (b) of Code Section 48-7-115, relating to income from farming and fishing, of the tax for the taxable year computed by placing on an annualized basis the taxable income for the months in the taxable year ending before the month in which the installment is required to be paid. For purposes of this paragraph, the taxable income shall be placed on an annualized basis by:
      1. Multiplying by 12 or, in the case of a taxable year of less than 12 months, by the number of months in the taxable year the taxable income (computed without deduction of personal exemptions) for the months in the taxable year ending before the month in which the installment is required to be paid;
      2. Dividing the resulting amount by the number of months in the taxable year ending before the month in which the installment date falls; and
      3. Deducting from the amount the deductions for any personal exemptions allowable for the taxable year, such personal exemptions to be determined as of the last date prescribed for payment of the installment.
    4. In the case of an individual, an amount equal to 90 percent of the tax computed at the rates applicable to the taxable year on the basis of the actual taxable income for the months in the taxable year ending before the month in which the installment is required to be paid.
  5. Application to individual. For purposes of applying this Code section in the case of an individual:
    1. The estimated tax shall be computed without any reduction for the amount which the individual estimates as his credit under subsection (a) of Code Section 48-7-112; and
    2. The amount of the credit allowed under subsection (a) of Code Section 48-7-112 for the taxable year shall be deemed a payment of estimated tax, and an equal part of the amount shall be deemed paid on each installment date as determined under Code Section 48-7-116 for the taxable year. If the taxpayer establishes the dates on which all amounts were actually withheld, the amounts so withheld shall be deemed payments of estimated tax on the dates on which the amounts were actually withheld.
  6. "Tax" defined. For purposes of subsections (b) and (d) of this Code section, the term "tax" means the tax imposed by Code Section 48-7-20 reduced by the credits against the tax allowed by law other than the credit against tax provided by subsection (a) of Code Section 48-7-112, relating to tax withheld on wages.

(Ga. L. 1960, p. 7, § 22; Ga. L. 1963, p. 18, § 5; Ga. L. 1975, p. 156, §§ 3, 4; Code 1933, § 91A-3921, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, §§ 79, 80; Ga. L. 2003, p. 428, § 1.)

Editor's notes.

- Ga. L. 2003, p. 428, § 2, not codified by the General Assembly, provides that this Act "shall be applicable to all taxable years beginning on or after January 1, 2003."

OPINIONS OF THE ATTORNEY GENERAL

Basis for computation of addition to tax.

- When a taxpayer has filed a return, the addition to the tax imposed by this section should be computed on the basis of the tax shown on the taxpayer's return and not with reference to any deficiency assessed against the taxpayer. 1967 Op. Att'y Gen. No. 67-401.

RESEARCH REFERENCES

C.J.S.

- 85 C.J.S., Taxation, §§ 2026 et seq., 2075 et seq.


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