Instructions for Form 760c - Underpayment of Virginia Estimated Tax by Individuals, Estates and Trusts 2017

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2017 Instructions for Form 760C
Underpayment of Virginia Estimated Tax by Individuals, Estates and Trusts
General Instructions
Part I ‑ Compute Your Underpayment
Line 1 ‑ Start with the tax liability reported on your income tax return.
Purpose of Form 760C
Subtract the Spouse Tax Adjustment and tax credits and enter the
Virginia law requires that you pay your income tax in timely installments
result here. (NOTE: Estimated tax payments, income tax withheld and
throughout the year by having income tax withheld or by making payments
extension payments are not tax credits.)
of estimated tax. If you do not pay at least 90% of your tax in this manner,
Line 5 ‑ Enter the number of payments required. You are required to make
you may be charged an addition to tax. Use Form 760C to determine
estimated tax payments when you receive income from any source other
whether you met the minimum payment requirement and/or whether you
than income on which sufficient Virginia income tax is withheld. For
are subject to an addition to tax charge.
calendar year filers, if you first received income subject to the estimated
You may also need to use this form to demonstrate that you have not made
tax payment requirements:
an underpayment, or that you have met an exception that voids the addition
Income Received
Payments Required
to tax, particularly if your income did not remain constant throughout the
year. See the instructions for Line 5 for more information.
On or before April 15
4 payments were required
Who Must File Form 760C
After April 15, but before June 2
3 payments were required
After June 1, but before September 2
2 payments were required
There are four installment periods for determining whether you underpaid
After September 1
1 payment was required
your tax during the year. For calendar year filers, the due dates for each
installment period are: May 1, June 15, September 15, and January 15.
If you were required to make less than four payments for Taxable
Fiscal year filers should refer to Virginia Form 760ES and the instructions
Year 2017 you must file Form 760C to indicate this. Otherwise, the
to determine their installment due dates. If your tax is underpaid as of
Department will automatically compute your liability as if you were
any installment due date, you must file Form 760C. The form must be
subject to pay estimated tax in all four installment periods, and you
filed even if you are due a refund when you file your tax return.
may be assessed an addition to tax.
Since underpayments are determined as of each installment due date,
Line 6 ‑ These are the due dates for calendar year filers. Fiscal year filers
an overpayment in one installment period cannot "cancel out" an
must write in the appropriate due dates for their fiscal year installment
underpayment in a previous period. You must also file Form 760C if you
periods.
were liable to make payments for less than four installment periods during
Lines 8 through 10 ‑ Use these lines to report timely payments and credits
the year (see the instructions for Line 5).
for each installment period. If you made any late payments, these
You are not required to file Form 760C if your income tax liability after
amounts will be taken into consideration on Line 12. For purposes
subtracting the Spouse Tax Adjustment and tax credits is $150 or less, or
of applying income tax withheld on Line 8, you may divide the total
if you were not required to file an income tax return.
amount withheld by four, or enter the exact amount withheld for each
installment and enclose a schedule showing your computation.
Special Rules for Farmers, Fishermen & Merchant Seamen
Line 11 ‑ If you overpaid your tax liability in any column, indicate this by
If you meet BOTH of the following tests, do not file this form; you do not
placing the amount in brackets, for example, [$500.00]. An overpayment
owe an addition to tax.
as of any installment date must be applied to any underpayment in
1. Your gross income from self-employment as a farmer, fisherman
previous periods before being carried over to subsequent periods. For
and/or being a merchant seaman is at least two-thirds of your annual
purposes of applying an overpayment on Form 760C, the overpayment
gross income for the taxable year, AND
is considered a payment made on the installment date for which the
2. You filed a Form 760, 760PY, 763 or 770 income tax return and
overpayment is reported. Enter each overpayment amount on the Late
paid the entire tax due by March 1, 2018.
Payment/Overpayment Table located below Line 14. For example, if
If you meet Test 1 but not Test 2, use Form 760F, Underpayment of
you compute an overpayment of $500.00 in Column C, enter $500.00
Estimated Tax by Farmers, Fishermen and Merchant Seamen, to determine
on the Late Payment/Overpayment Table, and indicate September 15,
whether you owe an addition to tax. If you do not meet Test 1, use Form
2017 as the date of payment.
760C.
Line 12 ‑ Other Payments ‑ On Line 12a, enter the earliest late payment
Due Date
or overpayment from the Late Payment/Overpayment Table. Then, enter
the amount needed in each column to satisfy the underpayment in each
If the due date falls on a Saturday, Sunday or legal holiday, then the return
period. Repeat this step for Lines 12b, 12c and 12d. Do not enter more
may be filed and the tax may be paid without penalty or interest on the
than is needed to satisfy the underpayment. For example, if a payment
next succeeding business day.
being applied in Column A is greater than the underpayment on Line
Questions
11, any excess should be carried over and applied in Column B, then
For assistance, contact the Commissioner of the Revenue, Director
Column C, then to Column D. See Line 13 instructions for an example.
of Finance or Director of Tax Administration for your Virginia city or
Line 13 ‑ Enter the total timely payments reported on Lines 8, 9, 10 and
county; or the Department of Taxation, P.O. Box 1115, Richmond, VA
12. In considering amounts from Line 12, compare the date of payment
23218‑1115 or (804) 367‑8031. Tenemos servicios disponible en Español.
with the installment due date.
If you have access to the internet, you can obtain most Virginia income
For example, a taxpayer made a late payment of $1,000 for the first
tax forms from www.tax.virginia.gov.
installment on May 15, 2017 and had an underpayment on Line 11,
Column A, of only $500. Therefore, on Line 12 the taxpayer applied
Line‑by‑Line Instructions
$500 in Column A and $500 in Column B. In considering timely
• Line-by-line instructions are provided only for lines that need additional
payments for completing Line 13, the taxpayer will compare the
clarification in order to be completed properly.
payment date of May 15, 2017, with the installment due dates for
Columns A and B. The installment due date for Column A is May 1,
• Fiscal Year Filers - If you filed your return on a fiscal year basis,
2017. Since the date of payment (May 15) falls after the installment
change the dates and interest rates accordingly on Form 760C. Enclose
due date, the $500 amount applied in Column A is a late payment and
your Form 760C and any computation schedules with your income tax
cannot be included on Line 13. The installment due date for Column
return.
B, however, is June 15, 2017, which falls after the date the payment
was made. Therefore, the $500 amount applied on Line 12, Column
Va. Dept. of Taxation
2601099
Rev. 12/17
2017 Instructions for Form 760C
Underpayment of Virginia Estimated Tax by Individuals, Estates and Trusts
General Instructions
Part I ‑ Compute Your Underpayment
Line 1 ‑ Start with the tax liability reported on your income tax return.
Purpose of Form 760C
Subtract the Spouse Tax Adjustment and tax credits and enter the
Virginia law requires that you pay your income tax in timely installments
result here. (NOTE: Estimated tax payments, income tax withheld and
throughout the year by having income tax withheld or by making payments
extension payments are not tax credits.)
of estimated tax. If you do not pay at least 90% of your tax in this manner,
Line 5 ‑ Enter the number of payments required. You are required to make
you may be charged an addition to tax. Use Form 760C to determine
estimated tax payments when you receive income from any source other
whether you met the minimum payment requirement and/or whether you
than income on which sufficient Virginia income tax is withheld. For
are subject to an addition to tax charge.
calendar year filers, if you first received income subject to the estimated
You may also need to use this form to demonstrate that you have not made
tax payment requirements:
an underpayment, or that you have met an exception that voids the addition
Income Received
Payments Required
to tax, particularly if your income did not remain constant throughout the
year. See the instructions for Line 5 for more information.
On or before April 15
4 payments were required
Who Must File Form 760C
After April 15, but before June 2
3 payments were required
After June 1, but before September 2
2 payments were required
There are four installment periods for determining whether you underpaid
After September 1
1 payment was required
your tax during the year. For calendar year filers, the due dates for each
installment period are: May 1, June 15, September 15, and January 15.
If you were required to make less than four payments for Taxable
Fiscal year filers should refer to Virginia Form 760ES and the instructions
Year 2017 you must file Form 760C to indicate this. Otherwise, the
to determine their installment due dates. If your tax is underpaid as of
Department will automatically compute your liability as if you were
any installment due date, you must file Form 760C. The form must be
subject to pay estimated tax in all four installment periods, and you
filed even if you are due a refund when you file your tax return.
may be assessed an addition to tax.
Since underpayments are determined as of each installment due date,
Line 6 ‑ These are the due dates for calendar year filers. Fiscal year filers
an overpayment in one installment period cannot "cancel out" an
must write in the appropriate due dates for their fiscal year installment
underpayment in a previous period. You must also file Form 760C if you
periods.
were liable to make payments for less than four installment periods during
Lines 8 through 10 ‑ Use these lines to report timely payments and credits
the year (see the instructions for Line 5).
for each installment period. If you made any late payments, these
You are not required to file Form 760C if your income tax liability after
amounts will be taken into consideration on Line 12. For purposes
subtracting the Spouse Tax Adjustment and tax credits is $150 or less, or
of applying income tax withheld on Line 8, you may divide the total
if you were not required to file an income tax return.
amount withheld by four, or enter the exact amount withheld for each
installment and enclose a schedule showing your computation.
Special Rules for Farmers, Fishermen & Merchant Seamen
Line 11 ‑ If you overpaid your tax liability in any column, indicate this by
If you meet BOTH of the following tests, do not file this form; you do not
placing the amount in brackets, for example, [$500.00]. An overpayment
owe an addition to tax.
as of any installment date must be applied to any underpayment in
1. Your gross income from self-employment as a farmer, fisherman
previous periods before being carried over to subsequent periods. For
and/or being a merchant seaman is at least two-thirds of your annual
purposes of applying an overpayment on Form 760C, the overpayment
gross income for the taxable year, AND
is considered a payment made on the installment date for which the
2. You filed a Form 760, 760PY, 763 or 770 income tax return and
overpayment is reported. Enter each overpayment amount on the Late
paid the entire tax due by March 1, 2018.
Payment/Overpayment Table located below Line 14. For example, if
If you meet Test 1 but not Test 2, use Form 760F, Underpayment of
you compute an overpayment of $500.00 in Column C, enter $500.00
Estimated Tax by Farmers, Fishermen and Merchant Seamen, to determine
on the Late Payment/Overpayment Table, and indicate September 15,
whether you owe an addition to tax. If you do not meet Test 1, use Form
2017 as the date of payment.
760C.
Line 12 ‑ Other Payments ‑ On Line 12a, enter the earliest late payment
Due Date
or overpayment from the Late Payment/Overpayment Table. Then, enter
the amount needed in each column to satisfy the underpayment in each
If the due date falls on a Saturday, Sunday or legal holiday, then the return
period. Repeat this step for Lines 12b, 12c and 12d. Do not enter more
may be filed and the tax may be paid without penalty or interest on the
than is needed to satisfy the underpayment. For example, if a payment
next succeeding business day.
being applied in Column A is greater than the underpayment on Line
Questions
11, any excess should be carried over and applied in Column B, then
For assistance, contact the Commissioner of the Revenue, Director
Column C, then to Column D. See Line 13 instructions for an example.
of Finance or Director of Tax Administration for your Virginia city or
Line 13 ‑ Enter the total timely payments reported on Lines 8, 9, 10 and
county; or the Department of Taxation, P.O. Box 1115, Richmond, VA
12. In considering amounts from Line 12, compare the date of payment
23218‑1115 or (804) 367‑8031. Tenemos servicios disponible en Español.
with the installment due date.
If you have access to the internet, you can obtain most Virginia income
For example, a taxpayer made a late payment of $1,000 for the first
tax forms from www.tax.virginia.gov.
installment on May 15, 2017 and had an underpayment on Line 11,
Column A, of only $500. Therefore, on Line 12 the taxpayer applied
Line‑by‑Line Instructions
$500 in Column A and $500 in Column B. In considering timely
• Line-by-line instructions are provided only for lines that need additional
payments for completing Line 13, the taxpayer will compare the
clarification in order to be completed properly.
payment date of May 15, 2017, with the installment due dates for
Columns A and B. The installment due date for Column A is May 1,
• Fiscal Year Filers - If you filed your return on a fiscal year basis,
2017. Since the date of payment (May 15) falls after the installment
change the dates and interest rates accordingly on Form 760C. Enclose
due date, the $500 amount applied in Column A is a late payment and
your Form 760C and any computation schedules with your income tax
cannot be included on Line 13. The installment due date for Column
return.
B, however, is June 15, 2017, which falls after the date the payment
was made. Therefore, the $500 amount applied on Line 12, Column
Va. Dept. of Taxation
2601099
Rev. 12/17
B, is a timely payment for the second period and will be included on
3. 2017 personal exemptions (Form 760, Line 13;
Line 13.
Form 760PY, Line 14; Form 763, Line 13; or
Line 14 ‑ Subtract Line 13 from Line 7. If the total of the underpayments
Form 770, enter 0). ..........................................
on Line 14, Columns A through D, is $150 or less, stop here. You do
4. Taxable Income - Subtract Lines 2 and 3 from
not owe the addition to tax. Enclose Form 760C with your return.
Line 1. .............................................................
Part II ‑ Exceptions That Void the Addition to Tax
5. Virginia Tax - Enter the tax computed on Line 4.
If you computed an underpayment on Line 14 for any installment
6. Total 2016 Spouse Tax Adjustment and credits
period, complete this section to determine if you meet an exception that
allowed. ...........................................................
voids the addition to tax. Exceptions are computed separately for each
7. Exception 2 Tax - Subtract Line 6 from Line 5.
installment period; therefore, you can meet an exception in one or more
Enter here and on Form 760C, Line 17. ..........
periods or meet different exceptions in different periods. If you do not
meet Exception 1 in a given period, you should try Exception 2, 3 and 4.
After completing the Exception 2 Worksheet, enter the results in
An exception met in one period does not automatically apply to any other
the appropriate columns on Line 17. Compare the amounts in each
period - each period must be considered separately.
column to the amounts in the corresponding columns on Line 15. If
the amount in any column on Line 15 equals or exceeds the amount
If you meet an exception, the addition to tax is voided for that period. If
in the corresponding column on Line 17, you met the exception for
you do not meet an exception, the addition to tax must be computed on the
that period. If you met Exception 2 for each period, you do not need to
underpayment amount reported on Line 14. An exception can only void
enclose Form 760C with your return. If you did not meet an exception
the addition to tax; it cannot reduce or eliminate an underpayment. Only
for every period in which you computed an underpayment, proceed to
timely payments can be considered in determining whether an exception
Exception 3.
has been met. For example, if payments for the first installment period,
May 1, 2017, are not made until after that date, no exception will be met
Line 18 ‑ Exception 3: Tax on Annualized 2017 Income ‑ This exception
for that period.
applies if your 2017 payments on Line 15 equal or exceed 90% of the
tax for each installment period computed using annualized income.
Line 15 ‑ Enter the total amount paid and/or withheld as of each installment
date. Estimated payments should be applied as follows:
"Annualized income" means the actual income received for the first
four, five and eight months of the taxable year (three, four and seven
If Payment Is Made
Apply to Installment Date
months for estates and trusts), multiplied by the factors shown above
On or before May 1 ...............................................May 1
Line 18 to arrive at the amount that would have been your taxable
Between May 2 and June 15 ...............................June 15
income if your income had remained constant during the year.
Between June 16 and September 15 ......... September 15
Complete Lines 18a through 18g ‑ Since Exception 3 cannot be applied to
Between September 16 and January 15 .........January 15
the final installment period, enter amounts for the first three installment
Line 16 ‑ Exception 1: Prior Year’s Tax ‑ This exception applies if your
periods only. Compare the amount on Line 18g in each column to
2017 payments on Line 15 equal or exceed your 2016 income tax
the amount reported in the corresponding column on Line 15. If the
liability for each installment period. Your 2016 Virginia income tax
amount in any column on Line 15 equals or exceeds the amount in the
return must have covered a full (twelve month) taxable year, and must
corresponding column on Line 18g, you met the exception for that
have reflected an income tax liability.
period. If you did not meet an exception for every period in which you
Exception 1 Worksheet
reported an underpayment, proceed to Exception 4.
1. Enter the amount shown on your 2016 Form 760,
Line 19 ‑ Exception 4: Tax on 2017 Income Over a 4, 5 and 8 Month
Line 19; Form 763, Line 19; or Form 770, Line 4.
Period ‑ This exception applies if your 2017 payments on Line 15
equal or exceed 90% of the income tax computed on the actual income
2. Enter the total of the amounts on your 2016 Form
received for the first four, five and eight months of the taxable year.
760, Lines 24 through 27; or Form 763, Lines 24
through 27; or Form 770, the credits included on
Complete Lines 19a through 19g ‑ Since Exception 4 cannot be applied to
Line 5. .............................................................
the final installment period, enter amounts for the first three installment
periods only. Compare the amount on Line 19g in each column with
3. 2016 Tax Liability: Subtract Line 2 from Line 1.
the amount reported in the corresponding column on Line 15. If the
Enter here and on Form 760C, Line 16. ..........
amount in any column on Line 15 equals or exceeds the amount reported
After completing the Exception 1 worksheet, enter the results in the
in the corresponding column on Line 19g, you met the exception for
appropriate columns on Line 16. Compare the amount in each column
that period.
to the amount entered in the corresponding column on Line 15. If the
Part III ‑ Compute the Addition to Tax
amount on Line 15 equals or exceeds the amount in the corresponding
column on Line 16, you met Exception 1 for that period. If you met
Line 21 ‑ If you applied any payments on Part I, Line 12, to offset the
Exception 1 for each period, you do not need to enclose Form 760C
underpayments entered on Line 20, use the same date of payment used
with your return. If you did not meet the exception for every period in
on Line 12. Otherwise, use the actual date the tax was paid in full or
which you reported an underpayment, proceed to Exception 2, Line
May 1, 2018, whichever is earlier. If you applied more than one payment
17.
per installment period to offset an underpayment, you must compute
the addition to tax separately for each payment applied. For example,
Line 17 ‑ Exception 2: Tax on Prior Year’s Income Using 2017 Rates
and Exemptions ‑ This exception applies if your withholding and/
if you report an underpayment of $1,000 for the first installment period
or timely estimated tax payments for the 2017 taxable year equal or
and pay $500 on May 15, 2017 AND $500 on June 30, 2017, you will
exceed an amount that would have been due by recomputing your tax
need to make two separate computations:
for the 2016 taxable year based on the facts shown on your return for,
Amount of Underpayment
From
To
and the law applicable to, that taxable year, but using 2017 rates and
$500.00
5/1/17
5/15/17
personal exemptions. You do not need to have filed a Virginia return
$500.00
5/1/17
6/30/17
or incurred a Virginia tax liability for the preceding taxable year to
qualify for Exception 2.
If you are required to make more than one computation, you should
compute your addition to tax on a separate schedule and enclose the
Exception 2 Worksheet
schedule with Form 760C.
1. 2016 Virginia adjusted gross income. .............
2. 2016 deductions (Form 760, Lines 12 and 14,
760PY, Lines 13 and 15 or 763, Lines 12 and 14;
or Form 770, enter 0). .....................................

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