Arizona § 43-581 - Payment of estimated tax; rules; penalty; forms

§ 43-581. Payment of estimated tax; rules; penalty; forms

A. An individual who is subject to the tax imposed by section 43-1011 and whose Arizona gross income, as defined by section 43-1001, or as described by section 43-1091 in the case of nonresidents, for the taxable year exceeds $75,000 or $150,000 if a joint return is filed and whose Arizona gross income was greater than $75,000 in the preceding taxable year or $150,000 in the preceding taxable year if a joint return is filed shall make payments of estimated tax during the individual's taxable year.  The amount of the payments of estimated tax shall be an amount that reasonably reflects a taxpayer's Arizona income tax liability that will be unpaid at the end of the taxpayer's taxable year. This amount shall be paid in four installments on or before the due dates established by the internal revenue code and shall total, when combined with the taxpayer's withholding tax, at least ninety percent of the tax due for the current taxable year or one hundred percent of the tax due for the preceding taxable year.

B. Any other individual who is subject to the tax imposed by this title may make payments of estimated tax during the individual's taxable year.  The amount of any estimated tax payments for the taxable year shall be an amount that reasonably reflects a taxpayer's Arizona income tax liability that will be unpaid at the end of the taxpayer's taxable year.

C. For taxable years beginning from and after December 31, 2021, an entity that is treated as a partnership or S corporation for federal income tax purposes, that elects to pay the tax under section 43-1014 and whose taxable income for the taxable year exceeds $150,000 in the preceding taxable year shall make payments of estimated tax during the taxable year in a manner that is consistent with the manner prescribed in this section for individuals.

D. The department shall prescribe rules for the payments of estimated tax that shall provide for estimated payments in a manner similar to the manner prescribed in the internal revenue code.

E. If the taxpayer does not pay the estimated tax required by subsection A or C of this section on or before the prescribed dates, there is assessed and the department shall collect a penalty on the unpaid amount as prescribed by section 42-1125, subsection Q. Penalties or interest shall not be assessed or collected if either of the following applies:

1. The estimated tax payments made pursuant to this section are allowable exceptions under section 6654 of the internal revenue code.

2. The taxpayer's Arizona income tax liability due on the taxpayer's return is less than $1,000. For the purposes of this paragraph, "Arizona income tax liability due on the taxpayer's return" means the amount of tax due on the return minus the amount of Arizona income tax withheld and tax credits claimed by the taxpayer.

F. The department shall make available suitable forms and instructions to taxpayers who make estimated tax payments pursuant to this article.