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Maine Penalty

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Maine Penalty

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Who Must Pay the Underpayment Penalty?

In general, you will owe an underpayment penalty if your 2018 tax liability less allowable credits and withholding is $1,000 or more and your 2017 tax liability before tax credits, income tax withholding or any other tax payment(s) for the tax year was $1,000 or more.

NOTE: Maine law disallows the use of the election to pay estimated tax based on the prior year’s tax liability when an unusual event occurs, such as realization of a large, one-time capital gain. You must pay 90% of the tax on the unusual event income for the installment period during which the unusual event occurs. An unusual event occurs when taxable income for the estimated tax installment period exceeds the taxable income received during the same period in the prior tax year by at least $500,000. If you received unusual event income during any estimated tax installment period beginning in 2018, you must adjust the estimated tax due on line 9 of this form for that period. You may be able to use the actual liability method described below to accomplish this recalculation.

You will not owe an underpayment penalty or need to file this form if your 2018 tax liability reduced by allowable credits and Maine income tax withheld is less than $1,000, or your 2017 tax liability was less than $1,000. Even though you are required to fi le this form, you will avoid the underpayment penalty if you paid at least 90% of the 2018 tax on time.

Farmers and Fishermen. If you are a farmer or fisherman who files an income tax return and pays the tax liability in full on or before March 1 of the following year, no penalty is due.

 


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Views: 1103 Created on: Jun 15, 2013
Date updated: Jan 10, 2019
Posted in: States, Maine

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