IP 92(5)

Estimated Connecticut Income Taxes for 1992

This publication explains filing requirements for paying 1992 estimated income tax. Connecticut taxpayers can be charged penalties and interest for underpaying their estimated income tax, even though they pay all the Connecticut income tax they owe by the April 15 filing deadline. Connecticut law requires taxpayers to pay State income tax during the year, through withholding or estimated tax payments. Most employees have these taxes automatically withheld from their paychecks. If you are self-employed, or receive a pension or annuity and have not elected Connecticut pension plan withholding, or you receive any other income from which State income tax is not withheld, you should probably be making estimated income tax payments.

WHAT IS ESTIMATED TAX? Estimated tax is the payment of taxes on income from which no tax is withheld during the year.  Because it is difficult to determine your exact tax bill before the end of the year, you make estimated tax payments during the year based upon what you expect to earn in the current year or based upon what you actually earned in the prior year. When you file your annual income tax return, you report your estimated tax payments. If you have overpaid your estimated tax during the year, you will receive a refund. If you have underpaid your taxes during the year, you will have to pay the tax you owe and you may have to pay a penalty and interest.

WHO SHOULD PAY ESTIMATED TAX? If you have more than $1,000 in  Connecticut taxable income from which state tax is not withheld during the year, you are required  to pay estimated income tax.  The checklist below includes many (although not all) of the types of income that may require you to pay estimated tax:

• self-employment
• pensions and annuities (if no state tax are withheld)
• prize winnings
• capital gains
• interest income
• dividend income
• gambling winnings (if no Connecticut income tax is withheld)
• rental income
• unemployment compensation
• federally taxable social security

To avoid the filing of an estimated tax, you may request your employer to withhold additional amounts from your wages to cover the taxes on other income.  You can make this change by providing your employer with a revised Form CT-W4.

HOW DO I ESTIMATE MY TAX? To figure your estimated tax payments, you will need Form CT-1040ES, 1992 Individual Estimated Income Tax Payment Forms. The instructions include a worksheet for computing your estimated tax payments, exemption and credit tables, and a coupon to be mailed in with your estimated payments.

WHEN DO I PAY MY ESTIMATED INCOME TAX?   Generally, you must make your first estimated income tax payment for 1992 by April 15,1992. You can pay all of your estimated tax with the first payment or pay the tax in four equal installments, due April 15, June 15, September 15,  1992, and January 15, 1993.  Taxpayers who file their returns on a fiscal year basis will make their payments on the fifteenth day of the fourth, sixth and ninth months of their fiscal year, and the first month of the following fiscal year. If your liability for estimated payments begins after April 1, 1992, consult the instructions for Form CT-1040ES to determine the payment schedule.

WHAT IF MY INCOME CHANGES DURING THE YEAR? Changes in income, deductions or exemptions during the year may require you to amend your original estimate or to begin making estimated tax payments in the middle of the taxable year.  Form CT-1040ES. 1992 Individual Estimated Income Tax  Payment Forms, includes a worksheet to calculate the new estimated income tax requirement. 

WHAT HAPPENS IF I UNDERESTIMATE MY TAX?  If you are required to make estimated income tax payments and you do not pay enough tax during the year through estimated tax payments and withholding or if you do not make the payments on time, penalty and interest on the tax underpaid may be charged. The penalty is 10 percent of the underpayment or $50, whichever is greater.   Interest of 1 1/4% per month or fraction thereof will also be assessed on the underpayment. 

You will not be subject to penalty or interest if your timely payments of withholding and estimated income taxes for the 1992 taxable year equal the lesser of: 

• 100 percent of your Connecticut income tax due for the 1992 taxable year; or

• 100 percent of your assumed tax.

Assumed Tax means your 1991 income tax liability recalculated using the 1992 income tax rate.  (Multiply your 1991 income tax liability by 3 to determine your assumed tax.)  Do not include any capital gains, dividends and interest tax paid on Schedule 394 in 1991.

FOR FURTHER INFORMATION: Please call the Department of Revenue Services during business hours, Monday through Friday:

• 1-800-382-9463 (toll-free within Connecticut), or

• 860-297-5962 (from anywhere).

TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911.

IP 92(5)
Income Tax
Issued: 2/92