§ 10003.3. Underpayment of estimated tax
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 72 P.S. Taxation and Fiscal AffairsEffective: October 18, 2006
Effective: October 18, 2006
72 P.S. § 10003.3
§ 10003.3. Underpayment of estimated tax
(a) In case of any underpayment of an installment of estimated tax by a taxpayer, there shall be imposed interest for the taxable year in an amount determined at the annual rate as provided by law upon the amount of the underpayment for the period of the underpayment, except that, in case of any substantial underpayment of estimated tax by a taxpayer, such interest for the taxable year shall be imposed in an amount determined at one hundred twenty per cent of the annual rate as provided by law upon the entire underpayment for the period of the substantial underpayment. For the purpose of this subsection, a substantial underpayment shall be deemed to exist for any period during which the amount of the underpayment equals or exceeds twenty-five per cent of the cumulative amount of installments of estimated tax which would be required to be paid if the estimated tax were equal to the amount as determined in subsection (b)(1).
(i) the cumulative amount of installments which would be required to be paid as of each installment date as defined in section 3003.2(c)1 if the estimated tax were equal to ninety per cent of the tax shown on the report for the taxable year, except that, if the total tax exceeds the tax shown on the report by ten per cent or more, the amount of the underpayment shall be based on ninety per cent of the amount of the total tax; over
(d) Notwithstanding the provisions of the preceding subsections, interest with respect to any underpayment of any installment of estimated tax 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 such installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were an amount equal to the tax computed at the rates applicable to the taxable year, including any minimum tax imposed, but otherwise on the basis of the facts shown on the report of the taxpayer for, and the law applicable to, the safe harbor base year, adjusted for any changes to sections 401, 601, 602 and 11012 enacted for the taxable year, if a report showing a liability for tax was filed by the taxpayer for the safe harbor base year. If the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of such installment does not equal or exceed the amount required to be paid per the preceding sentence, but such amount is paid after the date the installment was required to be paid, then the period of underpayment shall run from the date the installment was required to be paid to the date the amount required to be paid per the preceding sentence is paid. Provided, that if the total tax for the safe harbor base year exceeds the tax shown on such report by ten per cent or more, the total tax adjusted to reflect the current tax rate shall be used for purposes of this subsection. In the event that the total tax for the safe harbor base year exceeds the tax shown on the report by ten per cent or more, interest resulting from the utilization of such total tax in the application of the provisions of this subsection shall not be imposed if, within forty-five days of the mailing date of each assessment, payments are made such that the total amount of all payments of estimated tax equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were an amount equal to the total tax adjusted to reflect the current tax rate. In any case in which the taxable year for which an underpayment of estimated tax may exist is a short taxable year, in determining the tax shown on the report or the total tax for the safe harbor base year, the tax will be reduced by multiplying it by the ratio of the number of installment payments made in the short taxable year to the number of installment payments required to be made for the full taxable year.
Credits
1971, March 4, P.L. 6, No. 2, art. XXX, § 3003.3, added 1985, July 1, P.L. 78, No. 29, § 14, imd. effective. Amended 1988, Oct. 14, P.L. 737, No. 106, § 8, imd. effective; 1991, Aug. 4, P.L. 97, No. 22, § 39, imd. effective; 1997, May 7, P.L. 85, No. 7, § 32, effective July 1, 1997; 2003, Dec. 23, P.L. 250, No. 46, § 30, imd. effective; 2006, Oct. 18, P.L. 1149, No. 119, § 30, imd. effective.
72 P.S. § 10003.3, PA ST 72 P.S. § 10003.3
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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