289A.25 PAYMENT OF ESTIMATED TAX BY INDIVIDUALS, TRUSTS, OR
Subdivision 1. Requirements to pay.
An individual, trust, or partnership must, when
prescribed in subdivision 3, paragraph (b), make payments of estimated tax. The term "estimated
tax" means the amount the taxpayer estimates is the sum of the taxes imposed by chapter 290 for
the taxable year. If the individual is an infant or incompetent person, the payments must be made
by the individual's guardian. If joint payments on estimated tax are made but a joint return is not
made for the taxable year, the estimated tax for that year may be treated as the estimated tax of
either the husband or the wife or may be divided between them.
Notwithstanding the provisions of this section, no payments of estimated tax are required
if the estimated tax, as defined in this subdivision, less the credits allowed against the tax, is
less than $500.
Subd. 2. Additions to tax for underpayment.
(a) In the case of any underpayment of
estimated tax by a taxpayer, except as provided in subdivision 6 or 7, there must be added to and
become a part of the taxes imposed by chapter 290, for the taxable year an amount determined
at the rate specified in section
upon the amount of the underpayment for the period
of the underpayment.
(b) For purposes of paragraph (a), the amount of underpayment shall be the excess of
(1) the amount of the installment required to be paid, over
(2) the amount, if any, of the installment paid on or before the last day prescribed for the
Subd. 3. Period of underpayment.
(a) The period of the underpayment shall run from the
date the installment was required to be paid to the earlier of the following dates:
(1) The 15th day of the fourth month following the close of the taxable year.
(2) With respect to any part of the underpayment, the date on which that part is paid. For
purposes of this clause, a payment of estimated tax on any installment date is considered a payment
of any unpaid required installments in the order in which the installments are required to be paid.
(b) For purposes of this subdivision, there shall be four required installments for a taxable
year. The times for payment of installments shall be:
||For the following
||The due date is:
||January 15 of the following taxable year
Subd. 4. No addition to tax where tax is small.
No addition to tax is imposed under
subdivision 2 for a taxable year if the tax shown on the return for the taxable year (or, if no return
is filed, the tax) reduced by the credits allowable is less than $500.
Subd. 5. Amount of required installment.
The amount of any installment required to be
paid shall be 25 percent of the required annual payment except as provided in clause (3). The term
"required annual payment" means the lesser of
(1) 90 percent of the tax shown on the return for the taxable year or 90 percent of the tax
for the year if no return is filed, or
(2) the total tax liability shown on the return of the taxpayer for the preceding taxable year, if
a return showing a liability for the taxes was filed by the taxpayer for the preceding taxable year
of 12 months. If the adjusted gross income shown on the return of the taxpayer for the preceding
taxable year exceeds $150,000, this clause shall be applied by substituting "110 percent of the
total tax liability" for "the total tax liability"
(i) for an individual who is not a Minnesota resident for the entire year, the term "adjusted
gross income" means the Minnesota share of that income apportioned to Minnesota under section
290.06, subdivision 2c
, paragraph (e), or
(ii) for a trust the term "adjusted gross income" means the income assigned to Minnesota
(3) an amount equal to the applicable percentage of the tax for the taxable year computed by
placing on an annualized basis the taxable income and alternative minimum taxable income for
the months in the taxable year ending before the month in which the installment is required to
be paid. The applicable percentage of the tax is 22.5 percent in the case of the first installment,
45 percent for the second installment, 67.5 percent for the third installment, and 90 percent for
the fourth installment. For purposes of this clause, the taxable income and alternative minimum
taxable income shall be placed on an annualized basis by
(i) multiplying by 12 (or in the case of a taxable year of less than 12 months, the number
of months in the taxable year) the taxable income and alternative minimum taxable income
computed for the months in the taxable year ending before the month in which the installment
is required to be paid; and
(ii) dividing the resulting amount by the number of months in the taxable year ending before
the month in which the installment date falls.
A reduction in an installment under clause (3) must be recaptured by increasing the amount of
the next required installment by the amount of the reduction.
Subd. 5a.[Repealed, 1994 c 587 art 1 s 25
Subd. 6. Exception to addition to tax.
No addition to the tax shall be imposed under this
section for any taxable year if:
(1) the taxpayer did not have liability for tax for the preceding taxable year,
(2) the preceding taxable year was a taxable year of 12 months, and
(3) the individual or trust was a resident of Minnesota throughout the preceding taxable year.
Subd. 7. Waiver of addition to tax.
No addition to the tax is imposed under this section
with respect to an underpayment to the extent the commissioner determines that the provisions of
section 6654(e)(3) of the Internal Revenue Code apply.
Subd. 8. Application of section; tax withheld on wages.
For purposes of this section, the
estimated tax must be computed without reduction for the amount that the taxpayer estimates as
the taxpayer's credit under section
290.92, subdivision 12
(relating to tax withheld at source on
wages), and any other refundable credits allowed against income tax liability, and the amount
of those credits for the taxable year is considered a payment of estimated tax, and an equal part
of those amounts is considered paid on the installment date, determined under subdivision 3,
paragraph (b), for that taxable year, unless the taxpayer establishes the dates on which the
amounts were actually withheld, in which case the amounts so withheld are considered payments
of estimated tax on the dates on which the amounts were actually withheld.
Subd. 9. Special rule for return filed on or before January 31.
If, on or before January 31
of the following taxable year, the taxpayer files a return for the taxable year and pays in full the
amount computed on the return as payable, then no addition to tax is imposed under subdivision 2
with respect to any underpayment of the fourth required installment for the taxable year.
Subd. 10. Special rule for farmers and fishermen.
For purposes of this section, if an
individual is a farmer or fisherman as defined in section 6654(i)(2) of the Internal Revenue Code
for a taxable year, only one installment is required for the taxable year, the due date of which is
January 15 of the following taxable year, the amount of which is equal to the required annual
payment determined under subdivision 5 by substituting "66-2/3 percent" for "90 percent," and
subdivision 9 shall be applied by substituting "March 1" for "January 31," and by treating the
required installment described as the fourth required installment.
Subd. 11. Fiscal year taxpayer.
The application of this section to taxable years beginning
other than January 1 must be made by substituting, for the months named in this section, the
months that correspond. This section must be applied to taxable years of less than 12 months,
under rules issued by the commissioner.
Subd. 12. Estates.
The provisions of this section do not apply to an estate.
Subd. 13. Overpayment of estimated tax installment.
If an installment payment of
estimated tax exceeds the correct amount of the installment payment, the overpayment must be
credited against the unpaid installments, if any.
History: 1990 c 480 art 1 s 11; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 3,19; 1993 c 375
art 2 s 22-28; art 8 s 14; 1994 c 416 art 2 s 2; 1994 c 587 art 1 s 4,24; 2005 c 151 art 2 s 17