Neb. Admin. Code § 316-20-007 — Penalty Underpayment of Estimated Tax - Individuals

007.01 A penalty is due on any underpayment of estimated tax. For individuals, the amount of the underpayment for any installment date is the excess of 90% (66-2/3% in the case of farmers and fishermen) of the tax shown on the return for the taxable year or, if no return was filed, 90% (66-2/3% in the case of farmers and fishermen) of the tax for such year, or 100 % of the tax shown on the return for the preceding taxable year, whichever amount is lesser, divided by the number of installment dates prescribed for such year, over the amount, if any, of the installment paid on or before the last day prescribed for such payment. If federal adjusted gross income is more than $150,000, ($75,000 for married filing separately), then the applicable federal percentage of the tax for the preceding year must be used. 007.02 The term tax as used in Reg-20-007.01 of this regulation shall mean the individual income tax imposed under the provisions of the Nebraska Revenue Act of 1967, as amended, reduced by the allowable credits: elderly and disabled credit, Community Development Assistance Act credit, dependent or child care credit, personal exemption credit, credit for tax paid to another state, Nebraska Employment and Investment Expansion Act credit, Nebraska Employment and Investment Growth Act credit , Employment Expansion and Investment Incentive Act credit, Invest Nebraska Act credit, Beginning Farmer Tax credit, Nebraska Advantage Rural Development Act credit, Nebraska Advantage Microenterprise Tax credit, Nebraska Advantage Research and Development Act credit, and Nebraska Advantage Act credit . 007.03 The penalty is imposed at the same rate specified for interest in section 45-104.02 of the Nebraska Revised Statutes upon the underpayment of any installment from the date such installment is required to be paid to the due date of the return without regard to any extensions of time, or the date such underpayment is paid, whichever is earlier. The penalty is imposed in all circumstances except in the case of casualty, disaster, or other unusual circumstances, where imposition of a penalty would be inequitable or where the taxpayer retired after age 62 or became disabled and the underpayment was due to reasonable cause. 007.04 In determining the amount of the installment paid on or before the last day prescribed for payment thereof, the estimated tax shall be computed without any reduction for the amount which the taxpayer estimates as his or her credit under section 77-2753 of the Nebraska Revised Statutes, (relating to tax withheld at the source on wages). The amount of such credit shall be deemed a payment of estimated tax. An equal part of the amount of such credit shall be deemed paid on each installment date for the taxable year unless the taxpayer establishes the dates on which all amounts were actually withheld. 007.05 For nonresident individuals, in determining the amount of the installment paid on or before the last day prescribed for payment thereof, the estimated tax shall be computed without any reduction for the amount which the taxpayer estimates as his or her credit under sections 77-2717, 77-2727, or 77-2734.01 of the Nebraska Revised Statutes, (relating to tax withheld by small business corporations, partnerships, or fiduciaries). The amount of such credit shall be deemed a payment of estimated tax on the last day of the organization's taxable year unless the taxpayer establishes the dates on which all amounts were actually withheld. 007.06 Exceptions. The penalty will not be imposed for any underpayment of any installment of estimated tax if: 007.06A The tax liability for the preceding taxable year was zero, provided that the preceding tax return was, or would have been, had the taxpayer been required to file, for a full twelve month period, or 007.06B The total tax for the current year less any income tax withholding is less than $300. 007.07 If there has been an underpayment of estimated tax as of any installment date, the taxpayer shall complete and attach an Individual Underpayment of Estimated Tax, Form 2210N, to the Nebraska Individual Income Tax Return, Form 1040N, to determine the applicability of any of the exceptions described in Reg-20-007.06. The Department may request proof of federal acceptance of the waiver request or other documentation such as police reports, insurance company reports or documentation relating to retirement or disability status. (Sections, 77-2769, 77-2788, 77-2790, and 77-4106, R.R.S., 2003, and sections 77-2715.07 and 77-27,188, R.S.Supp.,2005. March 7, 2006.)