1.26-51-912 Generally

When a taxpayer files a declaration of estimated tax, it must be either 100% of the prior year's tax liability or 90% of the tax liability for the current tax year.

To avoid underestimate penalty, estimated tax payments shall be made by the quarterly installment due dates. If a taxpayer's income varied during the tax year, it may be able to reduce any underestimate penalties by computing the penalties using the “annualized” method, in which case both Forms AR2220A and AR2220 should be completed.