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006.05.308-26-18-208. TAX PENALTIES

AR ADC 006.05.308-26-18-208Arkansas Administrative Code

West's Arkansas Administrative Code
Title 006. Department of Finance and Administration
Division 05. Division of Revenues
Rule 308. Comprehensive Corporation Income Tax Regulations (Refs & Annos)
Ark. Admin. Code 006.05.308-26-18-208
006.05.308-26-18-208. TAX PENALTIES
Currentness
1.26-18-208(6)(A) Estimated Tax Penalty
Payments made with an extension of time to file corporation income tax returns do not constitute estimated tax payments. Estimated tax payments must be made by the required due dates.
Underestimate penalty is calculated by multiplying the underpayment for each quarter by .00027397 and then multiplying that figure by the number of days underpaid. There can be several calculations for each quarter when partial payments are received.
Example 1:
Corporation “A” FEIN 99-9999991, is a calendar year filer. The tax liability for tax year 12/94 was $40,000 and for tax year 12/95, the tax liability was $20,000. “A” has a $2,000 estimate credit carryforward from tax year 12/94. “A” filed an extension payment of $3,000 on 5/15/96. The 12/95 income tax return was filed 9/15/96. “A” paid estimated tax payments for tax year 12/95 as follows:
PAYMENT DATE
VOUCHER NO.
AMOUNT
05/15/95
1
$3,000
01/15/96
4
10,000
The required estimated tax due per quarter is $4,500 ($20,000 X 90% / 4). $500 of the 1st quarter overpayment ($3,000 + $2,000 - $4,500) is applied to the 2nd quarter estimate. The $10,000 4th quarter payment will be applied to the 2nd, 3rd and 4th quarter required estimates as follows: (1) $4,000 to the 2nd quarter, (2) $4,500 to the 3rd quarter, and (3) $1,500 to the 4th quarter. The amount subject to underestimate penalty and the penalty calculations are as follows:
Quarter
Quarterly Due Date
Payment Date
Underpay Amount
Underpaid Days
U/P amt x U/P days x .00027397
2nd
6/15/95
1/15/96
$ 4,000
214
$235
3rd
9/15/95
1/15/96
4,500
122
150
4th
1/15/96
*5/15/96
3,000
121
99
Total UEP
$484
*  5-15-96 is the original income tax return due date.
Example 2:
Corporation “B”, FEIN 99-9999992, is a fiscal year filer. The tax liability for tax year 3/94 was $15,010 and for tax year 3/95, the tax liability was $16,644. Corporation “B” filed an extension payment of $7,940 on 8/15/95. The income tax return was filed on 12/15/95. “B” paid estimated tax payments for tax year 3/95 as follows:
PAYMENT DATE
VOUCHER NO.
AMOUNT
08/15/94
1
$3,000
12/15/94
4
$10,000
The required estimated tax due per quarter is $3,745 ($16,644 X 90% / 4). The $10,000 4th quarter overpayment will be applied to the 1st, 2nd and 3rd quarters as follows:
(1) $745 to the 1st quarter, (2) $3,745 to the 2nd quarter, (3) $3,745 to the 3rd quarter, and (4) $1,765 to the 4th quarter. The amount subject to underestimate penalty and the penalty calculations are as follows:
Quarter
Quarterly Due Date
Payment Date
Underpay Amount
Underpaid Days
U/P amt x U/P days x .00027397
1st
8/15/94
12/15/94
$ 745
122
$25
2nd
9/15/94
12/15/94
3,745
91
93
4th
4/15/95
*8/15/95
1,765
122
59
Total UEP
$177
*  8-15-95 is the original income tax return due date.
1.26-18-208(6)(B)(iii) Estimated Tax Penalty
The estimated tax penalty will not be imposed if estimated tax payments equal or exceed the amount of tax liability shown on the taxpayer's return for the preceding tax year. The taxpayer's preceding tax year must have been for a period of twelve (12) months. “Tax liability shown on the taxpayer's return” means total tax, as reported, less business and incentive credits.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.308-26-18-208, AR ADC 006.05.308-26-18-208
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