Amount of Underpayment, the excess of the amount required in any estimated tax payment over the amount, if any, of the estimated tax payment made on or before the due date of the estimated tax payment.
Calendar Year, any taxable year beginning on January 1 and ending on December 31 of the same year. For the purposes of 830 CMR 63B.2.2(2): Calendar Year, any 52-53 week calendar year permitted under I.R.C. s. 441(f) is a 12 month calendar year; a taxpayer with a permitted 52-53 week calendar year should make estimated tax payments as if its taxable year began on January 1 and ending on December 31.
Commissioner, the Commissioner of Revenue or the Commissioner's designee duly authorized to perform the duties of the Commissioner.
Corporation, every corporation, company, or association subject to taxation under M.G.L. c. 63 or under any special act that is in lieu of the provisions of M.G.L. c. 63.
Credit against Tax, the sum of all estimated tax payments made between the beginning of the taxable year and the end of the taxable year plus any overpayment from the preceding taxable year that the taxpayer elected to apply against the current taxable year's estimated tax.
Current Taxable Year, the current or present period for which the taxpayer is required to file a return with the federal government, as defined under M.G.L. c. 63, § 1, § 30(6), § 30(12), or § 52A(1)(c).
Department, the Department of Revenue.
Employee, as defined in M.G.L. c. 62B, § 1.
Estimated Tax, the amount that a corporation estimates as the taxes due for the current taxable year under M.G.L. c. 63, any act in lieu thereof, or any act in addition thereto.
Estimated Tax Payment, the portion of tax due and paid on or before any of the required due dates for payment.
Fiscal Year, any taxable year of 12months beginning on a date other than January 1 and ending on a date other than December 31 of the same calendar year. For purposes of this definition, any 52-53 week fiscal year permitted under I.R.C. § 441(f) is a 12 month fiscal year; a taxpayer with a permitted 52-53 week fiscal year should make estimated tax payments as ifits taxable year beganonthe first of the calendar month closest to the actual first day of the taxable year and ended on the last day of the calendar month closest to the actual last day of the taxable year.
Period of Underpayment, the period from the due date of the estimated tax payment to the earlier of the following two dates: the due date of the return as required under M.G.L. c. 62C, § 11 or § 12, or, with regard to any amount of underpayment, the date the amount of underpayment is paid.
Preceding Taxable Year, the taxable year ending immediately before the beginning of the current taxable year.
Present Minimum Corporate Excise, the minimum corporate tax of $456, or the current applicable amount, as imposed by M.G.L. c. 63, §§ 32, 39, as amended by St. 1969, c. 546, § 18, and St. 1988, c. 202, §§ 14, 18, or any act in addition thereto, or the minimum corporate excise of $228, or the current applicable amount, as imposed by M.G.L. c. 63, § 38B.
Required Annual Payment, the amount of estimated tax required to be paid, as determined under M.G.L. c. 63B, § 3(c)(i) through (iii), as amended by St. 1989, c. 39, § 1, and under 830 CMR 63B.2.2(8)(b).
Short Taxable Year, any taxable year of less than 12 calendar months that is not a 52-53 week calendar year or fiscal year permitted under I.R.C. § 441(f).
Tax, the tax required to be paid under M.G.L. c. 63, any act in lieu thereof, or any act in addition thereto.
Tax Shown on the Return, tax liability shown on the return that is originally filed by the taxpayer.
Taxable Year, the period for which the taxpayer is required to file a return with the federal government, as defined under M.G.L. c. 63, § 1, § 30(6), § 30(12), or § 52A(1)(c).
Taxpayer, any corporation subject to taxation under M.G.L. c. 63, any act in lieu thereof, or in addition thereto.
Example 1: Osgood Co., a calendar year taxpayer, was purchased during a hostile takeover and closed its taxable year on June 15, 1989. Its next taxable year ended December 31, 1989. For purposes of calculating estimated tax payments due dates, the taxable year ending June 15, 1989, is a short taxable year of six months, and the taxable year beginning June 16, 1989, and ending December 31, 1989, is a short taxable year of seven months. Osgood's estimated tax payments for the short taxable year ending June 15, 1989, are due on April 15, 1989, and June 15, 1989. Osgood's estimated tax payments for the short taxable year beginning June 16, 1989, and ending December 31, 1989, are due on September 15, 1989, November 15, 1989, and December 15, 1989.
If an addition to tax for underpayment of estimated tax is imposed at the time a return is filed because the taxpayer did not come within the safe harbor of either 830 CMR 63B.2.2(8)(b)1 or 830 CMR 63B.2.2(8)(b)2. but subsequently - for example, after an abatement, or credit given on an audit, or reduction in tax resulting from a federal change - the taxpayer's estimated tax payments for that year equal or are greater than ninety percent of the taxpayer's revised tax liability for that year, then the previously imposed addition to tax will also be abated.
Example: Company A makes estimated tax payments during 2001 of$ 800 and files a 2001 corporate excise return showing a tax liability of $1,000. Company A's 2000 return showed a tax liability of $ 900. Because Company A does not meet either the 90% of this year's tax safe harbor or the 100% of last year's tax safe harbor, it pays an addition to tax on its underpayment of estimated tax. In 2003, Company A obtains an abatement of $ 150 for its 2001 corporate return. Because the $800 it paid in estimated tax payments for 2001 equals or is greater than 90% of Company A's actual 2001 tax liability ($850 x 90% = $ 765) the addition to tax paid on the 2001 return is abated.
These provisions are illustrated by the following example:
Example 2: Abbot, Inc., a calendar year taxpayer, reasonably expected in January 1989 that its tax for 1989 would be $10,000. On March 15, 1989, Abbot paid $3,000 (30% of $10,000) in estimated tax. On June 15, 1989, Abbot should pay $3,500 (25% plus 10% of $10,000); on September 15, 1989, Abbot should pay $2,500 (25% of $10,000); on December 15, 1989, Abbot should pay $1,000 (10% of $10,000).
830 CMR 63B.2.2
Date of Promulgation: 2/2/90
Amended: 12/27/96
Amended: 12/21/01 - sections (2); (8)(b)1; (8)(b)2.a; (8)(b)3