estimated income tax;
payment; penalties
Clarifies the conditions under which estimated income tax payments are required for taxpayers who file individual and joint returns. Exempts taxpayers whose Arizona income tax liability is less than $1,000 from interest or penalties if they fail to make estimate income tax payments.
History:
Currently taxpayers filing individual returns are required to make estimated payments if their Arizona gross income (AGI) in the current year can reasonably be expected to exceed $75,000 or was greater than $75,000 in the preceding taxable year. In addition, taxpayers filing a joint return must separately determine whether their AGI requires an estimated tax payment. An estimated payment is required if either spouse’s AGI for the current taxable year can be reasonably expected to exceed $75,000 or if it was greater than $75,000 in the preceding year. This bill creates a two-year threshold for determining whether an estimated tax payment is required and increases the AGI amount to $150,000 for married filing joint taxpayers.
Additionally, this bill removes the “reasonable cause” exception for the current year’s income because the threshold will be determined over a two-year period, and thus an influx of income at the end of the year will not trigger the requirement if the threshold was not met during the previous year. However, penalties may still be abated under the reasonable cause provision of the Taxpayer Bill of Rights.
Finally, this bill contains an
exception from the penalties and interest due should the taxpayer fail to make
estimated tax payments if the taxpayer’s liability is less than $1000.
Provisions
1. Requires taxpayers filing individual returns to make estimated tax payments if their AGI exceeds $75,000 in the current year and in the preceding taxable year. Currently, taxpayers filing individual returns are required to make estimated payments if their AGI in the current year can reasonably be expected to exceed $75,000 or was greater than $75,000 in the preceding taxable year.
2. Requires taxpayers filing joint returns to make estimated tax payments if their AGI exceeds $150,000 in the current year and in the preceding taxable year. Currently, an estimated payment is required if either spouse’s AGI for the current taxable year can be reasonably expected to exceed $75,000 or if it was greater than $75,000 in the preceding year.
3. Exempts the taxpayer from interest or penalties assessed on nonremittance of estimated tax payments if the taxpayer’s liability is less than $1,000.
4. Makes technical changes.
5. Contains an effective date of January 1, 2002.
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45th Legislature
First Regular Session 2 March
9, 2001
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