1.26 Ark. Code R. 18-208(6)(A)
Payments made with an extension of time to file corporation income tax returns do not constitute estimated tax payments. Estimated tax payments must be made by the required due dates.
Underestimate penalty is calculated by multiplying the underpayment for each quarter by .00027397 and then multiplying that figure by the number of days underpaid. There can be several calculations for each quarter when partial payments are received.
Example 1:
Corporation "A" FEIN 99-9999991, is a calendar year filer. The tax liability for tax year 12/94 was $40,000 and for tax year 12/95, the tax liability was $20,000. "A" has a $2,000 estimate credit carryforward from tax year 12/94. "A" filed an extension payment of $3,000 on 5/15/96. The 12/95 income tax return was filed 9/15/96. "A" paid estimated tax payments for tax year 12/95 as follows:
PAYMENT DATE | VOUCHER NO. | AMOUNT |
05/15/95 | 1 | $3,000 |
01/15/96 | 4 | 10,000 |
The required estimated tax due per quarter is $4,500 ($20,000 X 90% ÷ 4). $500 of the 1st quarter overpayment ($3,000 + $2,000 - $4,500) is applied to the 2nd quarter estimate. The $10,000 4th quarter payment will be applied to the 2nd, 3rd and 4th quarter required estimates as follows:
* 5-15-96 is the original income tax return due date.
Example 2:
Corporation "B", FEIN 99-9999992, is a fiscal year filer. The tax liability for tax year 3/94 was $15,010 and for tax year 3/95, the tax liability was $16,644. Corporation "B" filed an extension payment of $7,940 on 8/15/95. The income tax return was filed on 12/15/95. "B" paid estimated tax payments for tax year 3/95 as follows:
PAYMENT DATE | VOUCHER NO. | AMOUNT |
08/15/94 | 1 | $3,000 |
12/15/94 | 4 | $10,000 |
The required estimated tax due per quarter is $3,745 ($16,644 X 90% ÷ 4). The $10,000 4th quarter overpayment will be applied to the 1st, 2nd and 3rd quarters as follows:
* 8-15-95 is the original income tax return due date.
1.26 Ark. Code R. 18-208(6)(A)