§ 12-242d — Installment payment of estimated tax. Interest on underpayments.

Connecticut § 12-242d

• Jurisdiction: Connecticut
• Title 12: Taxation
• Ch. 208: Corporation Business Tax

Text

(a) For purposes of this section, there shall be four required installments for each income year. The due date for the first required installment is the fifteenth day of the third month of the income year. The due date for the second required installment is the fifteenth day of the sixth month of the income year. The due date for the third required installment is the fifteenth day of the ninth month of the income year. The due date for the fourth required installment is the fifteenth day of the twelfth month of the income year. (b) The amount of the first required installment shall be thirty per cent of the required annual payment, as defined in subsection (e) of this section. The amount of the second required installment shall be forty per cent of the required annual payment, as defined in subsection (e) of this section. The amount of the third required installment shall be ten per cent of the required annual payment, as defined in subsection (e) of this section. The amount of the fourth required installment shall be twenty per cent of the required annual payment, as defined in subsection (e) of this section. (c) Except as otherwise provided in this section, in the case of any underpayment of estimated tax by a company, there shall be added to the tax an amount determined by applying interest (1) at the rate of one per cent per month or fraction thereof, (2) to the amount of the underpayment, (3) for the period of the underpayment. (d) For purposes of this section, the amount of the underpayment shall be the excess of the required installment, over the amount, if any, of the installment paid on or before the due date for the installment. The period of the underpayment shall run from the due date for the installment to whichever of the following dates is earlier: (1) The fifteenth day of the fifth month of the next succeeding income year; or (2) with respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this subsection, a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid. (e) “Required annual payment” means the lesser of (1) ninety per cent of the tax shown on the return for the income year, or, if no return is filed, ninety per cent of the tax for such year, or (2) if the preceding income year was an income year of twelve months and if the company filed a return for the preceding income year showing a liability for tax, one hundred per cent of the tax shown on the return for the next preceding income year without regard to any credit under this chapter. (f) (1) In the case of any required installment, if the company establishes that the annualized income installment is less than the amount determined under subsection (b) of this section, the amount of such required installment shall be the annualized income installment. Any reduction in a required installment resulting from the application of this subsection shall be recaptured by increasing the amount of the next required installment by the amount of such reduction and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this subdivision. (2) In the case of any required installment, the annualized income installment is the excess, if any, of (A) an amount equal to the applicable percentage of the tax for the income year computed by placing on an annualized basis its net income for months in the income year ending before the due date for the installment, over (B) the aggregate amount of any prior required installments for the taxable year. (3) For purposes of this subsection, the applicable percentage for the first required installment is twenty-seven, the applicable percentage for the second required installment is sixty-three, the applicable percentage for the third required installment is seventy-two and the applicable percentage for the fourth required installment is ninety. (g) The application of this section to income years of less than twelve months shall be in accordance with regulations adopted by the commissioner. (h) No addition to tax shall be imposed under subsection (c) of this section for any income year if the tax shown on the return for such income year, or, if no return is filed, the tax, is one thousand dollars or less. (i) For income years commencing on or after January 1, 2003, and prior to January 1, 2005, no addition to tax shall be imposed under subsection (c) of this section to the extent such underpayment was created or increased by section 12-218d . (j) (1) The provisions of this section shall apply to taxable members of a combined group required to file a combined unitary tax return pursuant to section 12-222 . (2) The designated taxable member of a combined group shall be responsible for paying estimated tax installments, at the times and in the amounts specified in this section, on behalf of the taxable members of the combined group and in the form and manner prescribed by the Commissioner of Revenue Services.

Legislative History

(1963, P.A. 651, S. 10; 1969, P.A. 388, S. 5; P.A. 76-114, S. 10, 21; 76-322, S. 5, 27; P.A. 80-307, S. 9, 31; P.A. 81-255, S. 27, 37; 81-411, S. 17, 42; Nov. Sp. Sess. P.A. 81-4, S. 3, 32; P.A. 82-325, S. 3, 7; P.A. 89-16, S. 16, 31; P.A. 90-148, S. 8, 34; June Sp. Sess. P.A. 91-3, S. 102, 168; P.A. 93-74, S. 10, 67; 93-433, S. 2, 26; May Sp. Sess. P.A. 94-4, S. 10, 36, 85; P.A. 95-160, S. 64, 69; 95-327, S. 2, 10; P.A. 97-163, S. 1, 2; P.A. 98-244, S. 9, 35; P.A. 99-121, S. 7, 28; June 30 Sp. Sess. P.A. 03-6, S. 79; P.A. 15-244, S. 162; June Sp. Sess. P.A. 15-5, S. 139, 152; P.A. 17-147, S. 25.) History: 1969 act changed interest rate in Subsec. (a) from 0.5% to 0.75% per month; P.A. 76-114 amended Subsec. (a) (1) to change deadline from fifteenth day of ninth month to fifteenth day of sixth month, to change figures in Subsec. (a)(1)(a) from 28% to 40% reduced by $4,000, rather than $2,800, to change figure in Subsec. (a)(1)(b) from 35% to 50% and to increase interest rate to 1%, effective July 1, 1976, and applicable to income years commencing on or after January 1, 1977; P.A. 76-322 also changed interest rate to 1%; P.A. 80-307 temporarily raised interest rate to 1.25% for installments due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-255 provided for interest on installments not paid by a company subject to tax under Sec. 12-219(1)(B), effective July 1, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-411 continued interest on delinquent taxes at 1.25% per month, effective July 1, 1981, and applicable to taxes becoming due on or after January 1, 1981; Nov. Sp. Sess. P.A. 81-4 and P.A. 82-325 amended Subsec. (a)(1) to require payment of installment equaling the lesser of 50% of tax or 60% of assumed tax, replacing 40% (reduced by $4,000) and 50% figures respectively, amended Subsec. (a)(2) to require payment of installment equaling the lesser of 64% of tax or 80% of assumed tax, replacing 56% (reduced by $5,600) and 70% figures, raised interest from 1.25% to 1.66% and removed provisions specifically applicable to companies subject to taxation under Sec. 12-219(1)(B) which had required payment of installment equaling the lesser of 40% of tax or 50% of assumed tax and had assessed interest at rate of 1% per month, effective January 27, 1982, and applicable to corporations' income years commencing on or after January 1, 1982; P.A. 89-16 added minimum payment requirements for each of the four installment payments on the estimated tax, and added Subsec. (c) re penalty applicable when any payment is based on an estimated tax which is less than the minimum amount required and Subsec. (d) re definition of assumed tax for purposes of the payment option based on the assumed tax, effective March 23, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-148 amended the reference in Subsec. (a) to the amount of installment in the sixth month of the income year to conform with the increase from 60% to 70% of the tax as provided in Sec. 12-242c, effective January 1, 1991, and applicable to corporation income years commencing on or after that date; June Sp. Sess. P.A. 91-3 deleted former Subsec. (c) concerning imposition of a penalty for failure to pay a minimum installment, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 decreased interest rate from 1.66% to 1.25%, effective May 19, 1993, and applicable to taxes due and payable on and after January 1, 1994; P.A. 93-433 amended Subsec. (a) to provide that any credit taken pursuant to Sec. 12-217n shall be disregarded in determining the tax due under the income tax, effective July 1, 1993; May Sp. Sess. P.A. 94-4 in Subsec. (a) provided that any credit under Sec. 12-217t shall only be taken on any filing made in accordance with the provisions of Sec. 12-222, effective June 9, 1994, and also reduced interest rate from 1.25% to 1%, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 95-327 deleted Subsecs. (a) to (c) and added new Subsecs. (a) to (g) re timing and amounts of installment payments on estimated taxes, interest on underpayments, defined required annual payment, required credit disregards, and provisions re application of section, effective July 1, 1995, and applicable to estimated corporation business taxes for income years commencing on or after January 1, 1996; P.A. 97-163 amended Subsec. (e) to change the required annual payment to 150% for income year 1997 and 100% for income years 1998 and thereafter, effective June 24, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 98-244 reorganized Subsec. (e) and removed obsolete provision, inserted new Subsec. (f) allowing annualization of estimated tax payments and redesignated former Subsecs. (f) and (g) as (g) and (h), effective June 8, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 99-121 amended Subsec. (f)(2) to remove reference to the minimum tax base for purposes of the annualized income installment, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1998; June 30 Sp. Sess. P.A. 03-6 added Subsec. (i) re underpayments created or increased by Sec. 12-218d, effective August 20, 2003; P.A. 15-244 added Subsec. (j) re applicability of section to taxable members of combined group required to file combined unitary tax return, taxable member's responsibility to pay estimated tax installments, and annual payment when preceding income year commenced on or after January 1, 2014, but prior to January 1, 2015, effective June 30, 2015, and applicable to income years commencing on or after January 1, 2015; June Sp. Sess. P.A. 15-5 changed effective date of P.A. 15-244, S. 162, from June 30, 2015, and applicable to income years commencing on or after January 1, 2015, to January 1, 2016, and applicable to income years commencing on or after that date, effective June 30, 2015, and deleted Subsec. (j)(3) and (4) and made a conforming change, effective January 1, 2016, and applicable to income years commencing on or after that date; P.A. 17-147 amended Subsec. (d) to replace “first day” with “fifteenth day” and replace “fourth month” with “fifth month” and make a technical change, effective July 7, 2017, and applicable to income years commencing on or after January 1, 2017. Cited. 44 CA 529.