Form AR2210 — Penalty for Underpayment of Estimated Tax (Individual) Instructions

INSTR
Instructions For AR2210
Estimated Income Tax Penalty

1. (a) Every taxpayer subject to the tax levied by the Arkansas Income Tax Act shall make and file with the Commissioner

# EXCEPTIONS

1. Taxpayers whose income from farming for the income year can a declaration of the estimated tax for the income year if the taxpayer can reasonably expect the estimated tax to be $1,000 or more and income tax withholdings for the income year do not equal 90% of the estimated tax.

No penalty shall be imposed for a tax year if the tax shown on the return for such tax year is less than $1,000, or where the original amount of estimated tax is the same amount shown to be reasonably be expected to amount to at least two thirds (2/3) of the total gross income from all sources for the income year, may file such declaration and pay the estimated tax on or before the fifteenth (15th) day of the second (2nd) month after the close of the income year. In lieu of filing any declaration, you may file an income tax return and pay the tax on or before the fifteenth (15th) day of the third (3rd) month after the close of the income year.

1. In lieu of filing the fourth (4th) quarter installment the taxpayer may due by the return of the taxpayer for the preceding income year where such return showing a liability for tax was filed by the taxpayer for the preceding income year of twelve (12) months. file an income tax return and pay the tax on or before January 31 or on the last day of the first (1st) month after the close of the income year.
2. No penalty shall be imposed for a tax year if:

(b) The declaration of estimated tax shall be made on such forms and shall include such information as the Commissioner shall prescribe. Individual forms can be obtained by calling
(501) 682-1100 or from our website www.arkansas.gov/ incometax.
(c) The declaration, with the first payment, must be filed with the Commissioner on or before the fifteenth (15th) day of the fourth
(a) the preceding tax year was a tax year of twelve (12) months, and
(b) the taxpayer did not have a tax liability for the preceding tax year and
(c) the taxpayer was a resident of Arkansas throughout the preceding tax year.

1. No penalty shall be imposed with respect to any underpayment

(4th) month of the income year of the taxpayer. The remaining filings and payments are due on the fifteenth (15th) day of the sixth (6th) month, ninth (9th) month, and first (1st) month after the close of the income year. if the Commissioner of Revenue determines that by reasons of casualty, disaster, or other unusual circumstances the imposition of such penalty would be against equity and good conscience.

1. No penalty shall be imposed with respect to any underestimate

(d) A taxpayer who, due to change of circumstances, first meets the requirements for filing a declaration after the fifteenth (15th) day of the fourth (4th) month of the income year, shall make and file the declaration on or before the next regular quarterly tax payment date.

1. (a) A taxpayer who makes a declaration of estimated tax for the income year shall estimate an amount not less than ninety percent (90%) of the amount actually due. or underpayment if the Commissioner determines that:

(a) the taxpayer
(i) retired after having attained age 62, or
(ii) became disabled in the tax year for which such estimated payments were required to be made or in the tax year preceding such tax year, and
(b) such underpayment was due to reasonable cause and not to willful neglect.

1. Taxpayers with varied income may benefit by

(b) If a taxpayer fails to make a declaration of estimated tax and pay on the quarterly due date the equivalent to at least ninety percent (90%) of the amount actually due, a penalty of ten percent (10%) per annum shall be added to the amount of the underestimate. The ten percent (10%) per annum penalty will be applied on a quarterly basis. A taxpayer who has an uneven income may compute the ten percent (10%) penalty on an annualized basis. The underestimate penalty is computed on the lesser of the current year's tax liability or the previous year's tax liability.

1. (a) The penalty provided in ACA §26-18-208 (Supp.1997) for failure to make correct payments of estimated income tax shall not apply to the exceptions noted hereafter.

AR2210 Inst. Page 1 (R 7/5/2024) computing the ten percent (10%) penalty on an annualized basis. The penalty is computed using

# Form AR2210A which must be submitted with Form

AR1000F/AR1000NR or Form AR1002F/AR1002NR. If penalty computed using Form AR2210A, write "6" on Form AR1000F/AR1000NR, box 52A or Form AR1002F/ AR1002NR, box 38A.

INSTR
Instructions For AR2210
Estimated Income Tax Penalty

# PENALTY COMPUTATION EXAMPLE

Part II: The underpayment of estimated tax shall be computed as follows: The number of days from the due date of the quarterly payment to the date payment is actually made divided by 365, times ten percent (10%), times the amount of underpayment.
Line 1 Tax Liability $5,000
Line 2 90% of Tax Liability $4,500
Line 3 Payments $2,000
Line 4 Line (1) less Line (3) $3,000 Line 5 Prior Year Tax Liability $3,000 Line 6 Required Annual Payment $3,000 [Lesser of (2) or (5)]
Note: Payments reported on Line (3) shall be deemed to have been paid in four (4) equal payments on the quarterly due dates.
Part III: Required Installments … $3,000 divided by 4 = $750 Payments … $2,000 divided by 4 = $500 Column (a) 4-15-2025 Required Installment $750 Payment 4-15-2025 $500 Underpayment $250 Paid 6-15-2025 ($250) -0-4-15-2025 to 6-15-2025 = 61 days 61/365 X .10 X $250 = $4 First Quarter Penalty … $ 4 Column (b) 6-15-2025 Required Installment $750 Payment 6-15-2025 $500 Used 4-15-2025 ($250) ($250) Underpayment $500 Paid 9-15-2025 ($500) -0-6-15-2025 to 9-15-2025 = 92 days 92/365 X .10 x $500 = $13 Second Quarter Penalty … $13 Column (c) 9-15-2025 Required Installment $750 Payment 9-15-2025 $500 Used 6-15-2025 ($500) -0-Underpayment ($750) Paid 1-15-2026 $500 Paid 4-15-2026 $250 ($750) -0-9-15-2025 to 1-15-2026 = 122 days 122/365 X .10 X $500 = $17 9-15-2025 to 4-15-2026 = 212 days 212/365 X .10 X $250 = $15 Third Quarter Penalty … $32 Column (d) 1-15-2026 Required Installment $750 Payment $500 Used 9-15-2025 ($500) -0-Underpayment $750 Paid 4-15-2026 ($750) -0-1-15-2026 to 4-15-2026 = 90 days 90/365 X .10 x $750 = $18 Fourth Quarter Penalty … $18 Total Penalty … $67 AR2210 Inst. Page 2 (R 6/27/2025)