1993 Legislation Affecting Penalty and Interest Imposed Under Conn. General Statute §12-722
PURPOSE: The purpose of this Special Notice is to explain recently enacted legislation waiving penalty and interest, except in certain circumstances, for underpayment of estimated income tax otherwise due under Conn. Gen. Stat. § 12-722. The notice also explains those circumstances under which penalty and interest continue to apply.
STATUTORY AUTHORITY: 1993 Conn. Spec. Acts 3.
EFFECTIVE DATE: Applicable to taxable years beginning on or after January 1, 1992 and prior to January 1, 1993.
BACKGROUND: Pursuant to Conn. Gen. Stat. §12-722, a taxpayer who owes more than $200.00 in Connecticut income tax after subtracting Connecticut income tax withheld during the taxable year is required to make estimated income tax payments. Taxpayers who fail to make timely payments according to the prescribed installment schedule may be subject to penalty and interest. In March 1993, the General Assembly enacted Special Act 93-3 that provides for the waiver of penalty and interest for underpayment of required estimated payments except in certain circumstances and the refund of such payments already made for the 1992 taxable year.
WAIVER OF PENALTY AND INTEREST FOR TIMELY PAID 1992 TAXES: A taxpayer who pays the full amount of 1992 income tax by the required payment date (generally, April 15, 1993, but October 15, 1993 if a request for extension of time for payment was made on or before April 15, 1993) will not be subject to the penalty and interest that would otherwise be due because of the underpayment of estimated tax whether or not the 1992 income tax return is filed on time. (The full amount is the amount that is reported to be due on the income tax return.)
A taxpayer who has already paid the full amount of 1992 income tax and paid the penalty and interest due because of the underpayment of estimated tax (by filing Form CT-2210, Underpayment of Estimated Income Tax By Individuals and Fiduciaries) will receive an automatic refund of the penalty and interest. No additional filing is required.
A taxpayer who has not yet paid the full amount of 1992 income tax should not complete the Form CT-2210 or pay the penalty and interest as long as the full amount of 1992 income tax is paid by the required payment date.
CIRCUMSTANCES UNDER WHICH PENALTY AND INTEREST CONTINUE TO APPLY: Special Act 93-3 provides that penalty and interest will continue to apply on underpayment of estimated income tax:
Where a taxpayer is subject to a late payment penalty for failing to pay the amount of tax reported to be due on the 1992 income tax return by the required payment date pursuant to Conn. Gen. Stat. §12-735(a);
Where the Commissioner files a return on the best information obtainable pursuant to Conn. Gen. Stat. §12-735(b);
Where the taxpayer is subject to penalties pursuant to Conn. Gen. Stat. §12-736 for wilful failure to collect the tax, truthfully account for and pay over the tax, wilfully attempts to evade the tax, or with fraudulent intent fails to pay the tax;
Where criminal penalties apply pursuant to Conn. Gen. Stat. §12-737;
Where the taxpayer is subject to a penalty for making a false statement on a withholding form pursuant to Conn. Gen. Stat. §12-738.
Although the taxpayer in these circumstances may request a waiver of penalty due under Conn. Gen. Stat. §12-722, the waiver (if granted) will not apply to interest due on such underpayments.
FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 1993: The waiver of penalty and interest does not apply to taxable years beginning on or after January 1, 1993. Taxpayers should consult the following publications and forms to ensure that they will not be subject to penalty and interest on underpayment of estimated taxes:
IP 92(9) - Is My Connecticut Withholding Correct?
IP 92(5.2) - Estimated Connecticut Income Taxes for 1993
Form CT-1040ES - 1993 Individual Estimated Income Tax Coupon
EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.