Article: 50571
Overview
If you did not pay enough estimated tax throughout the year, or if your withholding and estimated payments were not made evenly across all quarters, New York State may assess a penalty for underpayment. Taxpayers can calculate this penalty themselves by completing the Underpayment of Estimated Tax Penalty screen, based on Form IT-2105.9.
Who Should Use This Form?
You may need to complete this form if:
- You are an individual or fiduciary, and
- You owed at least $300 in New York State tax after subtracting credits and withholding, and
- Your estimated tax payments and withholding were either:
- Insufficient, or
- Not made evenly throughout the year (even if the total was enough).
Note: Some taxpayers may be exempt from this penalty due to special circumstances like farming income, death, disaster relief, or other waivers.
Penalty Overview
The penalty is calculated similarly to interest on the underpaid amount, based on:
- The amount underpaid for each quarter, and
- The length of time the payment was late.
- The current interest rate, as set by the NYS Department of Taxation and Finance
How to Report
- Navigate to the State Taxes section on the left-hand side of the screen.
- Click the link: I’d like to see the forms I’ve filled out or search for a form.
- In the dropdown menu, select New York.
- Click on the Other tab.
- Select Underpayment of Estimated Tax Penalty to open the screen.
- Enter all applicable information. Note: Override entries are highlighted in green. Use these only if you are entering a manually calculated penalty or correcting software-calculated values.
- Click Save once complete.
Additional Resources
For further guidance, see: