2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 42 - Interest and Penalties › Subchapter I-A - Underpayment › § 47–4203. Underpayment of estimated tax by individuals

§ 47–4203. Underpayment of estimated tax by individuals.
(a) An individual shall pay 4 installments of estimated tax on the dates as provided in § 47-1812.08(i)(4) in the amounts provided under subsection (b) of this section.
(b)(1) The amount of each installment of estimated tax shall be the lesser of:
(A) The amount required under the annualized income method under paragraph (2) of this subsection, or
(B) Twenty-five percent of the lesser of:
(i) Ninety percent of the tax shown on the return for the taxable year (or, if no return is filed, 90% of the tax for the taxable year);
(ii)(I) Except as provided in sub-sub-subparagraph (II) of this sub- subparagraph, 100% of the tax shown on the return of the individual for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months; or
(II) For tax years beginning after December 31, 2011, 110% of the tax shown on the return of the individual for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months; or
(iii)(I) Except as provided in sub-sub-subparagraph (II) of this sub-subparagraph, 100% of the tax computed on the basis of the facts shown on the individual’s return for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months; or
(II) For tax years beginning after December 31, 2011, 110% of the tax computed on the basis of the facts shown on the individual’s return for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months.
(2)(A) The required payments under the annualized income method shall be, on a cumulative basis, as follows:
(i) On the first installment date, 22.5% of the tax for the taxable year based upon the annualized income of the individual for the first 3 months of the taxable year;
(ii) On the second installment date, 45% of the tax for the taxable year based upon the annualized income of the individual for the first 5 months of the taxable year;
(iii) On the third installment date, 67.5% of the tax for the taxable year based upon the annualized income of the individual for the first 8 months of the taxable year; and
(iv) On the fourth installment date, 90% of the tax for the taxable year.
(B) The annualized income method shall not apply to individuals filing a return for part of a taxable year except under regulations as the Mayor may prescribe.
(c)(1) Except as otherwise provided in this section, in the case of an underpayment of estimated tax by an individual, there shall be added to the tax imposed under § 47-1806.03(a) an amount of interest determined by applying the underpayment rate set forth in § 47-4201 to the amount of the underpayment for the period of the underpayment.
(2) For the purposes of this subsection:
(A) 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; and
(B) The period of the underpayment shall run from the due date for the installment to the earlier of the 15th day of the 4th month following the close of the taxable year or the date on which the amount of the underpayment is made; provided, that an underpayment that is unpaid during part of a month shall be considered to be paid at the end of the month.
(d) For the purposes of this section:
(1) A payment of estimated tax shall be credited against unpaid required installments in the order in which the installments are required to be paid.
(2) The term “tax” means the tax imposed by § 47-1806.03, less the amount of credit allowed against the tax (other than the credit under § 47-1806.04(b) for withholding of wages).
(3) The amount of the credit allowed under § 47-1806.04(b) for withholding of wages shall be deemed a payment of estimated tax. An equal part of such amount shall be deemed paid on each due date for the payment of estimated tax for the taxable year unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case the amounts withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld.
(4) The amount of a refund of a prior year’s tax applied against the tax during the taxable year shall be deemed a payment of estimated tax.
(e) Interest shall not be imposed under subsection (c) of this section for a taxable year if:
(1) The tax shown on the return for the taxable year (or, if no return is filed, the tax), reduced by applicable credits and payments of estimated tax that are timely made, is less than $ 100;
(2) The individual did not have any liability for tax for the preceding taxable year;
(3) The Mayor determines that:
(A) The taxpayer retired after having attained 62 years of age or developed a disability in the taxable year for which estimated payments were required to be made or in the taxable year preceding such taxable year; and
(B) The underpayment was due to reasonable cause and not to willful neglect;
(4) The Mayor determines that, by reason of casualty, disaster, or other unusual circumstances, the imposition of the addition to tax would be against equity and good conscience; or
(5) The taxpayer dies during the taxable year.
(Feb. 26, 2015, D.C. Law 20-155, § 7122(b), 61 DCR 9990.)
Emergency Legislation
For temporary (90 days) addition of this section, see §§ 7132(b) and 7133 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).
For temporary (90 days) addition of this section, see §§ 7122(b) and 7123 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).
For temporary (90 days) addition of this section, see §§ 7122(b) and 7123 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
Editor's Notes
Applicability of D.C. Law 20-155: Section 7123 of D.C. Law 20-155 provided that this subtitle shall be applicable for tax years beginning after December 31, 2014.