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Annualized Schedule for Underpayment of Estimated Tax

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This document is Indiana's annualized income schedule for underpayment of estimated taxes by individuals for 2008. It provides instructions for calculating required quarterly estimated tax payments using annualized income amounts. Key details include: - It allows farmers/fishermen to calculate required payments as 66.7% of annual income instead of 90%. - Taxpayers must annualize income for each payment period and calculate taxes owed based on exemptions and tax rates. - Minimum quarterly payments are 25% of the total required annual payment. Payments are compared to actual amounts due to determine underpayment, if any. - Withholding credits and estimated payments are applied to determine actual amounts due in each period.

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Indiana Department of Revenue Enclosure Schedule 2008 Annualized Income Schedule for the Sequence No. 07 IT-2210A Underpayment of Estimated Tax by Individuals State Form 48437 R8 / 12-08 Attach to Form IT-40, IT-40PNR or IT-40P Your Social Your first name and last name Security Number Spouse’s first name and last name (if filing a joint return) Spouse’s Social Security Number Section II Section I - Farmers and Fishermen Only - See Instructions Early Filers Gross Income from Annual Gross Income Two-thirds of Gross Check box if you filed Farming and Fishing from All Sources Income your 2008 tax return X 66.7%= 2007 and paid the total tax due by Feb. 2, 2009. X 66.7%= 2008 Section III - Required Annual Payment A. 2008 tax .................................................................................................................................................... A B. 2008 credits (not including withholding credits or estimated tax) ............................................................. B C. Subtract line B from line A ........................................................................................................................ C D. Multiply line C by 90% (.90) (Farmers/fisherman multiply by .667, see instructions) ................................ D E. 2008 withholding tax credit ....................................................................................................................... E F. Subtract line E from line C - If less than $1,000, STOP HERE! You do not owe a penalty .................. F G. Prior year’s tax - (Read instructions) ..................................................................................................... G H. Minimum required annual payment - Enter the lesser of line D or line G (if G is N/A, enter amount from D) H Section IV - STOP! Complete lines 1 through 12 for Columns A through D first. Column A Column B Column C Column D 1-1 to 3-31 1-1 to 5-31 1-1 to 8-31 1-1 to 12-31 1. Indiana adjusted income for each period ................................................. 1 1 2. Annualization amounts ...................... 2 4.0 2.4 1.5 2 1.0 3. Annualized income: Multiply line 1 by line 2 3 3 4. Exemptions: Line 14 of Form IT-40 or line 10 of Form IT-40PNR 4 4 5. Annualized state taxable income (line 3 minus line 4) ............................ 5 5 6. State income tax: Multiply line 5 by 3.4% (.034) ................................... 6 6 7. County income tax: See instructions . 7 7 8. Annualized total tax: Add lines 6 and 7 . 8 8 9. Credits: For each period, enter the sum of lines 26 through 31 of Form IT-40 or lines 22 through 28 of Form IT-40PNR ........................................... 9 9 10. Annualized tax: Subtract line 9 from line 8. If less than zero, enter -0- ...... 10 10 11. Applicable installment percentages ... 11 .225 .450 .675 11 .900 12. Installment amount due: Multiply line 10 by line 11 ................................ 12 12
Schedule IT-2210A Column A Column B Column C Column D Section IV cont’d... 1-1 to 3-31 1-1 to 5-31 1-1 to 8-31 1-1 to 12-31 12a. Enter amounts carried from the front page, line 12 .......................... 12a 12a STOP! Complete lines 13 through 25 for each column, beginning with Column A, before going to the next column. 13. Amount from line 19 of all preceding columns (see instructions) ............... 13 13 14. Total Tax: Subtract line 13 from line 12a. If less than zero, leave blank ... 14 14 15. Minimum tax due: Enter 25% (.25) of line H from Section III ................. 15 15 16. Enter the amount from line 18 of the preceding column ........................... 16 16 17. Total minimum tax: Add lines 15 and 16 ........................................ 17 17 18. Subtract line 14 from line 17. If less than zero, leave blank ..................... 18 18 19. Actual estimated tax due: Enter the lesser of line 14 or line 17 here. Carry to line 13 of the next column .. 19 19 20. Indiana state income tax withheld .... 20 20 21. Indiana county income tax withheld . 21 21 22. Estimated tax payments .................. 22 22 23. Total amount paid: Add lines 20 through 22 ....................................... 23 23 24. Overpayment: If line 23 is greater than line 19, enter the difference here .................................................. 24 24 25. Underpayment: If line 19 is greater than line 23, enter the difference here .................................................. 25 25 26. Add line 25, Columns A + B + C + D and enter the total here................................................................................ 26 27. Penalty due. Multiply line 26 by 10% (.10) and enter total here and on line 39 of Form IT-40 or line 36 of Form IT-40PNR ............................................................................................................................................... 27 Annualized Income Schedule for the Underpayment of Indiana Individual Estimated Tax: Line-by-line Instructions Who Should File Schedule IT-2210A? Schedule IT-2210A or Schedule IT-2210: Which one to use Most taxpayers have state and county income taxes withheld from their You should use Schedule IT-2210A to: 1) figure your penalty, or 2) to income by their employers; therefore, the income taxes are usually show you paid enough estimated tax for a period if you received any paid in “even” amounts throughout the year. However, if you are self- seasonal income, such as Christmas tree sales, fireworks sales, etc., employed, earn seasonal income, have income which does not have and you made any estimated tax payments that coincide with the receipt state and county income taxes withheld or expect to owe more than of that income. If the income you received (on which no Indiana income $1,000 of state or county income taxes at the time you file your annual tax is withheld) is evenly distributed during the year, such as pension income tax return, you might be required to pay estimated taxes during income, then you should file Schedule IT-2210 instead. See the line- the tax year. Either Schedule IT-2210 or Schedule IT-2210A are used by-line instructions for assistance. to determine if you paid enough estimated taxes each period. If you did not, then you can figure the penalty you might owe for the underpayment Section I - Farmers and Fishermen of the estimated taxes. If at least two-thirds of your income for 2007 or 2008 was from farming or fishing, you have only one payment due date for 2008 estimated tax - Jan. 15, 2009.
To meet an exception to the underpayment Line G: Prior Year’s Tax Exception: If you filed multiply that total by the tax rate(s) from your penalty for 2008, you may use option 1 or 2: a 2007 IT-40 as a full year resident, add lines 2008 Indiana individual income tax return. See 16 and 17 (your income tax) and subtract the the example below. Note: See CAUTION box 1. Pay all your estimated tax by Jan. 15, 2009, totals of lines 26 through 30 (your credits). Enter below. and file your Form IT-40 by April 15, 2009, the result here. If you filed a 2007 IT-40PNR OR as a full-year nonresident, add lines 12 and Example: 13 from that return and subtract the total of the • Kay moved to Indiana on Sept. 15, 2007, 2. File your Form IT-40 by March 2, 2009, and lines 22 through 26 credits. Enter the result so she was a resident for 3.5 months. pay all the tax due. You are not required to here. Note: See CAUTION box below. • Her 2007 IT-40PNR line 1 income is make an estimated tax payment if you choose $10,000. this second option. If you pay all the tax due, If you filed a 2007 IT-40PNR as a part-year • Her 2008 total exemptions are $3,500. you will not be penalized for failure to pay resident of Indiana, you must figure the tax for • The 2008 adjusted income tax rate is estimated tax. that prior year on an annualized basis. You can 3.4% (.034). Her 2008 county tax rate is accomplish this by multiplying the IT-40PNR 1% (for a 4.4% [.044] combined state and Note: If at least two-thirds of your gross income line 1 income by 12 months and dividing the county tax rate). was not from farming or fishing, you do not result by the number of months you were an meet this exception. You must complete the Indiana resident. Then figure the state tax Use Steps 1 through 4 below to figure the rest of this schedule. and county tax (if applicable) by subtracting prior year’s tax exception for line G of Kay’s your 2008 exemptions from the result and IT-2210A. Section II - Early Filers If you file your individual income tax return and Step 1 $ 10,000 (2007 Indiana income) Step 3 $ 34,286 pay the tax due by Feb. 2, 2009, you will not be x 12 months - $ 3,500 (2008 exemptions) required to make a 4th installment estimated $ 120,000 annualized income $ 30,786 tax payment. For additional information see the instructions for line 22. Step 2 $ 120,000 annualized income Step 4 $ 30,786 (2008 combined state x 4.4% and county tax rate) ÷ 3.5 months (2007) residency) Section III - Required Annual Payments $ 1,355* $ 34,286 Section III will determine if you should have paid estimated taxes during the year and the *The $1,355 Step 4 total should be entered as an exception on line G of Kay’s Schedule IT-2210A. minimum amount required. CAUTION: If your 2008 state taxable income (line 15 of Form IT-40 or line 11 of Form Line A: 2008 Tax: Enter the state adjusted in- IT-40PNR) was more than $150,000 ($75,000 for married individuals filing separately), you come tax, county income tax, Indiana advance must enter 110% of last year’s tax (instead of 100%) on line G. earned income credit payment and recapture of Indiana’s CollegeChoice 529 credit from Example: Chris and Kate’s 2008 state taxable income from line 15 of Form IT-40 was your individual income tax return: add lines $158,000. They would take the following steps to arrive at the exception amount for line G: 16, 17, 20 and 21 from the IT-40 or lines 12, 13, 16 and 17 from the IT-40PNR and enter a) 2007 IT-40 total income tax (line 16 plus line 17) .......................................... $ 6,952 the total here. b) 2007 IT-40 credits (lines 26, 27, 28, 29 and 30) ............................................ - 1,952 c) Subtotal .......................................................................................................... $ 5,000 Line B: 2008 Credits: Enter the credits (except d) Exception to the penalty percentage .............................................................x 110% withholding and estimated tax payments) from e) Amount for line G of Schedule IT-2210A ....................................................... $ 5,500 your tax return. Add lines 26 through 31 from the IT-40 or lines 22 through 28 from the IT- Note: If Chris and Kate’s 2008 state taxable income had been less than $150,000, they 40PNR and enter the total here. would have entered $5,000 intead of $5,500 on Line G. Line D: To determine 90 percent of your total expected tax, multiply line C by 90 percent. Line H: Minimum Required Annual Payment: Enter the lesser of line D or line G. If the line G entry Note: If at least two-thirds of your gross income is N/A, enter the amount from line D on this line. Continue to Section IV. is from farming or fishing, multiply line D by 66 2 /3 percent (.667). Section IV - Annualized Method STOP! Complete lines 1 through 25 for each column, begin- ning with Column A, before going to the next column. Line E: 2008 Withholding: Your 2008 state and county income taxes withheld from your Line 1: 2008 Indiana Adjusted Income: You must use the amount from Form IT-40, line 9 or from earnings should equal the combined lines 23 Form IT-40PNR, line 3, and figure how much of this income was earned during each period. and 24 amounts from the IT-40 or the combined Note that each column includes the income totals from all previous columns. See the example lines 19 and 20 from the IT-40PNR. Enter the at the top of the next page. total here. Line 4: Exemptions: Enter the total amount of exemptions shown on line 14 of Form IT-40 or Line F: Subtract line E from line C. If this line 10 of Form IT-40PNR. Enter the total amount in each column. amount is less than $1,000, you do not owe a penalty. Stop here and attach a copy of Line 5: Annualized State Taxable Income: Subtract line 4 from line 3. If the difference is a nega- this schedule to your individual income tax tive number, put no entry on this line. return.
Figure their Indiana adjusted income for: Example: Jean and Jerry’s 2008 Indiana adjusted income was figured • The period 1-1-08 through 3-31-08 (first 3 months (mos) of the using the following information: year): 3 mos/12 mos (or .25) x $30,000 wage = .......................... $7,500 Jean’s wage income earned evenly $50 a month interest x 3 months = ......................................... 150 throughout the year......................................................... $ 30,000 3 mos/12 mos (or .25) x $2,500 renter’s deduction = ....... -625 Jerry’s net income from fireworks sales earned Line 1, Column A Indiana Adjusted Income = ................... $7,025 in June and July ................................................................. 22,000 Total joint interest income ($50 received monthly) ..................... 600 • The period 1-1-08 through 5-31-08 (first 5 months (mos) of the Renter’s deduction for renting all year ................................... -2,500 year): Indiana adjusted income for 2008 .....................................*$ 50,100 5 mos/12 mos (or .42) x $30,000 wage = ....................... $12,600 $50 a month interest x 5 months = .................................... 250 They will have to figure how much wage and interest income was 5 mos/12 mos (or .42) x $2,500 renter’s deduction = ....... -1,050 earned on a monthly basis, and how much renter’s deduction is Line 1, Column B Indiana Adjusted Income = .................$11,800 available for each month. Then they can figure the portion of their Indiana adjusted income for each of the time periods shown on line • The period 1-1-08 through 8-31-08 (first 8 months (mos) of the 1, Columns A - D. year): 8 mos/12 mos (or .67) x $30,000 wage = ....................... $20,100 *This $50,100 amount will be entered on line 1, Column D of their $50 a month interest x 8 months = ......................................... 400 Schedule IT-2210A. Jerry’s net income (all received in June and July) = ......... 22,000 8 mos/12 mos (or .67) x $2,500 renter’s deduction = ........ -1,675 Line 1, Column C Indiana Adjusted Income = ................ $40,825 Note: If your withholding should change ment to any estimated tax paid for the third Line 7: County Income Tax: Multiply the during the year, please show the increase installment period on line 22, Column C. amount on line 5 by your resident county tax or decrease in the period when the change rate from line 4 of your county tax schedule occurred. Note: If, after subtracting any previous under- (CT-40 or CT-40PNR) or multiply the amount payments, this amount is less than zero, no on line 5 that is principal employment income Line 21: Indiana County Tax Withheld: Divide overpayment will be available to carry over to (less allowable exemptions) by the nonresident the amount on line 24 of Form IT-40 or line 20 the next installment period. Also, do not carry county tax rate from line 6 of your county tax of Form IT-40PNR by four and enter the result over a negative figure if this amount is less than schedule. in each column. See note above. zero. For example, a first period underpayment of $80 plus a second period overpayment of Line 9: Credits: Enter the applicable portion of Line 22: 2008 Estimated Tax Payments: En- $50 results in a $30 net underpayment. This credits from lines 26 through 31 of Form IT-40 or ter the actual amount of estimated taxes paid amount is not to be used to decrease any cred- lines 22 through 28 of Form IT-40PNR for each timely by the 15th day following the close of the its for the next installment period. period. Example: If you made a contribution period. Payments made after the due dates are to a college in July, this credit may be taken in to be reported in the next column. Line 25: Underpayment: If line 23 is less than Column C and Column D. line 19, enter the difference on this line. Note for Early Filers: If you file your individual Line 13: Enter the amount (if any) from line 19 income tax return and pay the total tax due Line 26: Add lines 25A + 25B + 25C + 25D of all preceding columns. Example: To com- by Feb. 2, 2009, you will not be required to and enter the total here. plete line 13, Column D, add line 19 amounts make a 4th installment estimated tax payment. from Columns A, B and C. Enter this amount You should include on line 22, Column D, the Line 27: Penalty for the underpayment of in Column D. amount of tax you paid with your tax return estimated tax: Multiply line 26 by 10 percent. (Form IT-40 or IT-40PNR) minus any house- Enter the amount here and on line 39 of Form Line 15: Minimum Tax Due: Enter 25 percent hold employment tax, use tax, advance earned IT-40 or line 36 of Form IT-40PNR. Be sure of line H (from Section III) in each column. income payments, recapture of Indiana’s Col- to attach Schedule IT-2210A to your income legeChoice 529 plan credit and/or the amount tax return. Line 16: Tax Carryover: Enter the amount from shown on the return to be applied to your 2008 line 18 of the preceding column. This line keeps estimated tax account. track of the portion of your average tax that was not imposed for the previous period. Line 24: Installment Period Overpayment: If the total payment (line 23) is more than the Line 19: Actual Estimated Tax Due: Enter the required payment due (line 19) for an install- smaller amount from line 14 or line 17 on this ment period, enter the difference on this line. line. This is the actual amount of estimated This amount should then be added to line 22 tax you should have paid for this period. Also, in the next column after subtracting any under- enter this amount on line 13 of the next column. payment(s) shown on line 25 in the previous (Because this is subtracted in columns B, C, column(s). and D, you will not pay a penalty on the same underpayment twice.) Example: Mike had a $100 underpayment on line 25, Column A. He had a $130 overpay- Line 20: Indiana State Tax Withheld: Divide ment on line 24, Column B. The net overpay- the amount on line 23 of Form IT-40 or line 19 ment from the first two installment periods is of Form IT-40PNR by four and enter the result $30 ($130 - $100). He’ll add this net overpay- in each column.

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Annualized Schedule for Underpayment of Estimated Tax

  • 1. Indiana Department of Revenue Enclosure Schedule 2008 Annualized Income Schedule for the Sequence No. 07 IT-2210A Underpayment of Estimated Tax by Individuals State Form 48437 R8 / 12-08 Attach to Form IT-40, IT-40PNR or IT-40P Your Social Your first name and last name Security Number Spouse’s first name and last name (if filing a joint return) Spouse’s Social Security Number Section II Section I - Farmers and Fishermen Only - See Instructions Early Filers Gross Income from Annual Gross Income Two-thirds of Gross Check box if you filed Farming and Fishing from All Sources Income your 2008 tax return X 66.7%= 2007 and paid the total tax due by Feb. 2, 2009. X 66.7%= 2008 Section III - Required Annual Payment A. 2008 tax .................................................................................................................................................... A B. 2008 credits (not including withholding credits or estimated tax) ............................................................. B C. Subtract line B from line A ........................................................................................................................ C D. Multiply line C by 90% (.90) (Farmers/fisherman multiply by .667, see instructions) ................................ D E. 2008 withholding tax credit ....................................................................................................................... E F. Subtract line E from line C - If less than $1,000, STOP HERE! You do not owe a penalty .................. F G. Prior year’s tax - (Read instructions) ..................................................................................................... G H. Minimum required annual payment - Enter the lesser of line D or line G (if G is N/A, enter amount from D) H Section IV - STOP! Complete lines 1 through 12 for Columns A through D first. Column A Column B Column C Column D 1-1 to 3-31 1-1 to 5-31 1-1 to 8-31 1-1 to 12-31 1. Indiana adjusted income for each period ................................................. 1 1 2. Annualization amounts ...................... 2 4.0 2.4 1.5 2 1.0 3. Annualized income: Multiply line 1 by line 2 3 3 4. Exemptions: Line 14 of Form IT-40 or line 10 of Form IT-40PNR 4 4 5. Annualized state taxable income (line 3 minus line 4) ............................ 5 5 6. State income tax: Multiply line 5 by 3.4% (.034) ................................... 6 6 7. County income tax: See instructions . 7 7 8. Annualized total tax: Add lines 6 and 7 . 8 8 9. Credits: For each period, enter the sum of lines 26 through 31 of Form IT-40 or lines 22 through 28 of Form IT-40PNR ........................................... 9 9 10. Annualized tax: Subtract line 9 from line 8. If less than zero, enter -0- ...... 10 10 11. Applicable installment percentages ... 11 .225 .450 .675 11 .900 12. Installment amount due: Multiply line 10 by line 11 ................................ 12 12
  • 2. Schedule IT-2210A Column A Column B Column C Column D Section IV cont’d... 1-1 to 3-31 1-1 to 5-31 1-1 to 8-31 1-1 to 12-31 12a. Enter amounts carried from the front page, line 12 .......................... 12a 12a STOP! Complete lines 13 through 25 for each column, beginning with Column A, before going to the next column. 13. Amount from line 19 of all preceding columns (see instructions) ............... 13 13 14. Total Tax: Subtract line 13 from line 12a. If less than zero, leave blank ... 14 14 15. Minimum tax due: Enter 25% (.25) of line H from Section III ................. 15 15 16. Enter the amount from line 18 of the preceding column ........................... 16 16 17. Total minimum tax: Add lines 15 and 16 ........................................ 17 17 18. Subtract line 14 from line 17. If less than zero, leave blank ..................... 18 18 19. Actual estimated tax due: Enter the lesser of line 14 or line 17 here. Carry to line 13 of the next column .. 19 19 20. Indiana state income tax withheld .... 20 20 21. Indiana county income tax withheld . 21 21 22. Estimated tax payments .................. 22 22 23. Total amount paid: Add lines 20 through 22 ....................................... 23 23 24. Overpayment: If line 23 is greater than line 19, enter the difference here .................................................. 24 24 25. Underpayment: If line 19 is greater than line 23, enter the difference here .................................................. 25 25 26. Add line 25, Columns A + B + C + D and enter the total here................................................................................ 26 27. Penalty due. Multiply line 26 by 10% (.10) and enter total here and on line 39 of Form IT-40 or line 36 of Form IT-40PNR ............................................................................................................................................... 27 Annualized Income Schedule for the Underpayment of Indiana Individual Estimated Tax: Line-by-line Instructions Who Should File Schedule IT-2210A? Schedule IT-2210A or Schedule IT-2210: Which one to use Most taxpayers have state and county income taxes withheld from their You should use Schedule IT-2210A to: 1) figure your penalty, or 2) to income by their employers; therefore, the income taxes are usually show you paid enough estimated tax for a period if you received any paid in “even” amounts throughout the year. However, if you are self- seasonal income, such as Christmas tree sales, fireworks sales, etc., employed, earn seasonal income, have income which does not have and you made any estimated tax payments that coincide with the receipt state and county income taxes withheld or expect to owe more than of that income. If the income you received (on which no Indiana income $1,000 of state or county income taxes at the time you file your annual tax is withheld) is evenly distributed during the year, such as pension income tax return, you might be required to pay estimated taxes during income, then you should file Schedule IT-2210 instead. See the line- the tax year. Either Schedule IT-2210 or Schedule IT-2210A are used by-line instructions for assistance. to determine if you paid enough estimated taxes each period. If you did not, then you can figure the penalty you might owe for the underpayment Section I - Farmers and Fishermen of the estimated taxes. If at least two-thirds of your income for 2007 or 2008 was from farming or fishing, you have only one payment due date for 2008 estimated tax - Jan. 15, 2009.
  • 3. To meet an exception to the underpayment Line G: Prior Year’s Tax Exception: If you filed multiply that total by the tax rate(s) from your penalty for 2008, you may use option 1 or 2: a 2007 IT-40 as a full year resident, add lines 2008 Indiana individual income tax return. See 16 and 17 (your income tax) and subtract the the example below. Note: See CAUTION box 1. Pay all your estimated tax by Jan. 15, 2009, totals of lines 26 through 30 (your credits). Enter below. and file your Form IT-40 by April 15, 2009, the result here. If you filed a 2007 IT-40PNR OR as a full-year nonresident, add lines 12 and Example: 13 from that return and subtract the total of the • Kay moved to Indiana on Sept. 15, 2007, 2. File your Form IT-40 by March 2, 2009, and lines 22 through 26 credits. Enter the result so she was a resident for 3.5 months. pay all the tax due. You are not required to here. Note: See CAUTION box below. • Her 2007 IT-40PNR line 1 income is make an estimated tax payment if you choose $10,000. this second option. If you pay all the tax due, If you filed a 2007 IT-40PNR as a part-year • Her 2008 total exemptions are $3,500. you will not be penalized for failure to pay resident of Indiana, you must figure the tax for • The 2008 adjusted income tax rate is estimated tax. that prior year on an annualized basis. You can 3.4% (.034). Her 2008 county tax rate is accomplish this by multiplying the IT-40PNR 1% (for a 4.4% [.044] combined state and Note: If at least two-thirds of your gross income line 1 income by 12 months and dividing the county tax rate). was not from farming or fishing, you do not result by the number of months you were an meet this exception. You must complete the Indiana resident. Then figure the state tax Use Steps 1 through 4 below to figure the rest of this schedule. and county tax (if applicable) by subtracting prior year’s tax exception for line G of Kay’s your 2008 exemptions from the result and IT-2210A. Section II - Early Filers If you file your individual income tax return and Step 1 $ 10,000 (2007 Indiana income) Step 3 $ 34,286 pay the tax due by Feb. 2, 2009, you will not be x 12 months - $ 3,500 (2008 exemptions) required to make a 4th installment estimated $ 120,000 annualized income $ 30,786 tax payment. For additional information see the instructions for line 22. Step 2 $ 120,000 annualized income Step 4 $ 30,786 (2008 combined state x 4.4% and county tax rate) ÷ 3.5 months (2007) residency) Section III - Required Annual Payments $ 1,355* $ 34,286 Section III will determine if you should have paid estimated taxes during the year and the *The $1,355 Step 4 total should be entered as an exception on line G of Kay’s Schedule IT-2210A. minimum amount required. CAUTION: If your 2008 state taxable income (line 15 of Form IT-40 or line 11 of Form Line A: 2008 Tax: Enter the state adjusted in- IT-40PNR) was more than $150,000 ($75,000 for married individuals filing separately), you come tax, county income tax, Indiana advance must enter 110% of last year’s tax (instead of 100%) on line G. earned income credit payment and recapture of Indiana’s CollegeChoice 529 credit from Example: Chris and Kate’s 2008 state taxable income from line 15 of Form IT-40 was your individual income tax return: add lines $158,000. They would take the following steps to arrive at the exception amount for line G: 16, 17, 20 and 21 from the IT-40 or lines 12, 13, 16 and 17 from the IT-40PNR and enter a) 2007 IT-40 total income tax (line 16 plus line 17) .......................................... $ 6,952 the total here. b) 2007 IT-40 credits (lines 26, 27, 28, 29 and 30) ............................................ - 1,952 c) Subtotal .......................................................................................................... $ 5,000 Line B: 2008 Credits: Enter the credits (except d) Exception to the penalty percentage .............................................................x 110% withholding and estimated tax payments) from e) Amount for line G of Schedule IT-2210A ....................................................... $ 5,500 your tax return. Add lines 26 through 31 from the IT-40 or lines 22 through 28 from the IT- Note: If Chris and Kate’s 2008 state taxable income had been less than $150,000, they 40PNR and enter the total here. would have entered $5,000 intead of $5,500 on Line G. Line D: To determine 90 percent of your total expected tax, multiply line C by 90 percent. Line H: Minimum Required Annual Payment: Enter the lesser of line D or line G. If the line G entry Note: If at least two-thirds of your gross income is N/A, enter the amount from line D on this line. Continue to Section IV. is from farming or fishing, multiply line D by 66 2 /3 percent (.667). Section IV - Annualized Method STOP! Complete lines 1 through 25 for each column, begin- ning with Column A, before going to the next column. Line E: 2008 Withholding: Your 2008 state and county income taxes withheld from your Line 1: 2008 Indiana Adjusted Income: You must use the amount from Form IT-40, line 9 or from earnings should equal the combined lines 23 Form IT-40PNR, line 3, and figure how much of this income was earned during each period. and 24 amounts from the IT-40 or the combined Note that each column includes the income totals from all previous columns. See the example lines 19 and 20 from the IT-40PNR. Enter the at the top of the next page. total here. Line 4: Exemptions: Enter the total amount of exemptions shown on line 14 of Form IT-40 or Line F: Subtract line E from line C. If this line 10 of Form IT-40PNR. Enter the total amount in each column. amount is less than $1,000, you do not owe a penalty. Stop here and attach a copy of Line 5: Annualized State Taxable Income: Subtract line 4 from line 3. If the difference is a nega- this schedule to your individual income tax tive number, put no entry on this line. return.
  • 4. Figure their Indiana adjusted income for: Example: Jean and Jerry’s 2008 Indiana adjusted income was figured • The period 1-1-08 through 3-31-08 (first 3 months (mos) of the using the following information: year): 3 mos/12 mos (or .25) x $30,000 wage = .......................... $7,500 Jean’s wage income earned evenly $50 a month interest x 3 months = ......................................... 150 throughout the year......................................................... $ 30,000 3 mos/12 mos (or .25) x $2,500 renter’s deduction = ....... -625 Jerry’s net income from fireworks sales earned Line 1, Column A Indiana Adjusted Income = ................... $7,025 in June and July ................................................................. 22,000 Total joint interest income ($50 received monthly) ..................... 600 • The period 1-1-08 through 5-31-08 (first 5 months (mos) of the Renter’s deduction for renting all year ................................... -2,500 year): Indiana adjusted income for 2008 .....................................*$ 50,100 5 mos/12 mos (or .42) x $30,000 wage = ....................... $12,600 $50 a month interest x 5 months = .................................... 250 They will have to figure how much wage and interest income was 5 mos/12 mos (or .42) x $2,500 renter’s deduction = ....... -1,050 earned on a monthly basis, and how much renter’s deduction is Line 1, Column B Indiana Adjusted Income = .................$11,800 available for each month. Then they can figure the portion of their Indiana adjusted income for each of the time periods shown on line • The period 1-1-08 through 8-31-08 (first 8 months (mos) of the 1, Columns A - D. year): 8 mos/12 mos (or .67) x $30,000 wage = ....................... $20,100 *This $50,100 amount will be entered on line 1, Column D of their $50 a month interest x 8 months = ......................................... 400 Schedule IT-2210A. Jerry’s net income (all received in June and July) = ......... 22,000 8 mos/12 mos (or .67) x $2,500 renter’s deduction = ........ -1,675 Line 1, Column C Indiana Adjusted Income = ................ $40,825 Note: If your withholding should change ment to any estimated tax paid for the third Line 7: County Income Tax: Multiply the during the year, please show the increase installment period on line 22, Column C. amount on line 5 by your resident county tax or decrease in the period when the change rate from line 4 of your county tax schedule occurred. Note: If, after subtracting any previous under- (CT-40 or CT-40PNR) or multiply the amount payments, this amount is less than zero, no on line 5 that is principal employment income Line 21: Indiana County Tax Withheld: Divide overpayment will be available to carry over to (less allowable exemptions) by the nonresident the amount on line 24 of Form IT-40 or line 20 the next installment period. Also, do not carry county tax rate from line 6 of your county tax of Form IT-40PNR by four and enter the result over a negative figure if this amount is less than schedule. in each column. See note above. zero. For example, a first period underpayment of $80 plus a second period overpayment of Line 9: Credits: Enter the applicable portion of Line 22: 2008 Estimated Tax Payments: En- $50 results in a $30 net underpayment. This credits from lines 26 through 31 of Form IT-40 or ter the actual amount of estimated taxes paid amount is not to be used to decrease any cred- lines 22 through 28 of Form IT-40PNR for each timely by the 15th day following the close of the its for the next installment period. period. Example: If you made a contribution period. Payments made after the due dates are to a college in July, this credit may be taken in to be reported in the next column. Line 25: Underpayment: If line 23 is less than Column C and Column D. line 19, enter the difference on this line. Note for Early Filers: If you file your individual Line 13: Enter the amount (if any) from line 19 income tax return and pay the total tax due Line 26: Add lines 25A + 25B + 25C + 25D of all preceding columns. Example: To com- by Feb. 2, 2009, you will not be required to and enter the total here. plete line 13, Column D, add line 19 amounts make a 4th installment estimated tax payment. from Columns A, B and C. Enter this amount You should include on line 22, Column D, the Line 27: Penalty for the underpayment of in Column D. amount of tax you paid with your tax return estimated tax: Multiply line 26 by 10 percent. (Form IT-40 or IT-40PNR) minus any house- Enter the amount here and on line 39 of Form Line 15: Minimum Tax Due: Enter 25 percent hold employment tax, use tax, advance earned IT-40 or line 36 of Form IT-40PNR. Be sure of line H (from Section III) in each column. income payments, recapture of Indiana’s Col- to attach Schedule IT-2210A to your income legeChoice 529 plan credit and/or the amount tax return. Line 16: Tax Carryover: Enter the amount from shown on the return to be applied to your 2008 line 18 of the preceding column. This line keeps estimated tax account. track of the portion of your average tax that was not imposed for the previous period. Line 24: Installment Period Overpayment: If the total payment (line 23) is more than the Line 19: Actual Estimated Tax Due: Enter the required payment due (line 19) for an install- smaller amount from line 14 or line 17 on this ment period, enter the difference on this line. line. This is the actual amount of estimated This amount should then be added to line 22 tax you should have paid for this period. Also, in the next column after subtracting any under- enter this amount on line 13 of the next column. payment(s) shown on line 25 in the previous (Because this is subtracted in columns B, C, column(s). and D, you will not pay a penalty on the same underpayment twice.) Example: Mike had a $100 underpayment on line 25, Column A. He had a $130 overpay- Line 20: Indiana State Tax Withheld: Divide ment on line 24, Column B. The net overpay- the amount on line 23 of Form IT-40 or line 19 ment from the first two installment periods is of Form IT-40PNR by four and enter the result $30 ($130 - $100). He’ll add this net overpay- in each column.