- General Rules
- Calculating the Estimated Tax
- Qualified Farmers or Fishermen - Estimated Tax Special Provisions
- Estimated Income Tax Payment Vouchers with Instructions and Worksheets
- Overpayment Applied to Estimated Tax for Succeeding Tax Year
- Underpayment of Estimated Tax
- Make Estimated Payments
- Estimated Payments History
- Where to Report on Original Tax Return; What to Enclose
- Massachusetts References
Taxpayers must make estimated payments if the expected tax due on taxable income not subject to withholding exceeds certain thresholds as determined by the Commissioner of Revenue. This is to ensure that taxpayers are able to meet the statutory requirement that taxes due are paid periodically as income is received during the year. Taxpayers are required to file declarations of estimated tax and pay such tax in four installments.
Taxpayers are generally required to pay at least 80% of their annual income tax liability before the year's return is filed. This requirement is met through withholding and by making estimated tax payments on any income that is not subject to withholding.
- for an individual - if the expected tax due on taxable income not subject to withholding exceeds $400;
- for a fiduciary, corporate trust or non-profit organization not engaged in business for profit - if the expected tax due on taxable income exceeds $400.
Types of Income from which taxpayers may not have had taxes withheld:
- Salaries and wages from employment not subject to Massachusetts withholding;
- Unemployment compensation (if you did not elect voluntary Massachusetts withholding)
- Dividends and interest income;
- Gains from the sale or exchange of capital assets;
- Income from a trade, business, profession, partnership or S corporation;
- Income from an estate or trust;
- Certain Lottery or gambling winnings;
- Income from certain pensions or retirement savings plan;
- Rental income.
|Estimated Tax Worksheet|
|Interest and Dividends||= $15,000|
|Total Income||= $60,000|
|Less: Deductions/Exemptions||= ($16,000)|
|Taxable Income||= $43,400|
|Estimate of Income Tax ($43,400 x .0525)||= $2,279|
|Amount of this Tax Expected to be Withheld||= $1,679|
|Estimated Tax||= $600|
|80% of Estimated Tax Due ($600 x .80)||= $480|
- Form 1-ES - 2015 Massachusetts Estimated Income Tax Instructions and Worksheet for Individuals (for those filing Form 1 or Form 1 NR/PY, including composite nonresident filers for partners and S corporation shareholders); or
- Form 2-ES - 2015 Massachusetts Estimated Income Tax Instructions and Worksheet for Filers of Forms 2, 3F and 3M (for fiduciaries filing Form 2; corporate trusts filing Form 3F; or non-profit organization not engaged in business for profit filing Form 3M).
Taxpayers should then pay the amount calculated in four installments with either:
- 1-ES - 2015 Estimated Tax Payment Vouchers for Individuals ; or
- 2-ES - 2015 Estimated tax Payment Vouchers for Filers of Forms 2, 3F and 3M
To determine the correct estimated tax on the worksheet, credits are applied in the following order:
- credits allowed under G.L. c. 62 other than s. 6. which are the limited income credit and full employment credit; and
- credits allowed under G.L. c. 62, s. 6. which are: taxes paid to other jurisdiction credit; energy credit; lead paint removal credit; economic opportunity area credit; earned income credit; and repair or replacement of failed cesspool or septic system credit.
Installment Payment Requirements:
Each installment is 25% of the required annual payment and should be paid along with a filled out Estimated Tax Payment Voucher as follows:
|Installment||Due Date of Installment|
|#1||April 15 of the taxable year|
|#2||June 15 of the taxable year|
|#3||September 15 of the taxable year|
|#4||January 15 of the succeeding table year|
Submitting Installment Payments:
Estimated tax payments can be made online by visiting DOR's MassTaxConnect or they can be mailed to :
PO Box 7007
Boston, MA 02204
Verification of Installment Payments - IVR and Website:
Taxpayers may access the total amount of their estimated tax payments as captured on MASSTAX by either calling the IVR (Interactive Voice Response) at 617-887-6367 or 1-800-392-6089 or by visiting DOR's MassTaxConnect. Taxpayers must provide their Social Security Numbers and either their refund or balance due amounts from last year. If practitioners call for their clients, they will authenticate the call using their PTINs or SSNs.
Estimated tax for annualized income allows taxpayers who earn their income unevenly throughout the year to adjust their estimated installment payments by annualizing their income.
Overpayment Applied to Estimated Tax for Succeeding Taxable Year:
If an overpayment of tax is claimed as a credit against estimated tax for the succeeding taxable year, it will be considered as a payment of tax for the succeeding taxable year.
This means that a taxpayer may request that a portion of his overpayment of taxes, (refund), be carried forward as a credit to estimated payments for the succeeding taxable year.
Overpayment May Not Be Refunded:
Once an election is made to apply an overpayment to the succeeding year, it cannot be refunded later or applied to any additional tax owed in the taxable year in which the overpayment was incurred.
Also, if an amended return is filed, the estimated carry forward amount originally requested and properly allowed cannot be increased or decreased.
Prior Year and Current Year Payments:
All forms provide a line for the overpayment carried forward from the prior year and a separate line for current year payments.
Qualified Farmers or Fisherman – Estimated Tax Special Provisions:
An individual qualifies as a farmer or fisherman for any taxable year if his/her gross income from farming or fishing is at least two-thirds of his/her annual gross income.
Farmers and fishermen are generally required to pay at least 66 2/3% rather than the 80% of their annual income tax liability before the year's return is filed.
- The amount of estimated taxes paid on 1-ES vouchers is reported on either Mass Form 1, Line 38 or 1-NR/PY, Line 43.
- The amount of estimated tax to be applied to the succeeding taxable year is reported on Mass Form 1, Line 45 or 1-NR/PY, Line 50.
- M.G.L. Chapter 62B, Sections 13; 14 as amended by St. 2004, c. 262, ss. 23 and 24; 14(c)(ii)
- M.G.L. Chapter 62, Section 6
- M.G.L. Chapter 62C, Section 79(d)
- Chapter 485 of the Acts of 1998, "An Act Reforming the Tax Laws of the Commonwealth" (ATB and Administrative Reform memorandum)
- TIR 04-25: Effect of Recent Legislation on the Personal Income Tax, Withholding of Tax, and the Declaration of Estimated Tax by Individuals
- TIR 01-16: Extensions Relating to the September 11, 2001 Terrorist Attacks
- AP 241: Estimated Income Tax Payments
- DOR Guide: Should You Be Paying Individual Estimated Taxes?