Ic 6-3-4-4.2 - Estimated Payments by Corporate Taxpayers; report and Payment of Estimated Tax; Electronic funds Transfer

Effective 1-1-2026.

     Sec. 4.2. (a) The following apply for purposes of this section:

(1) "Final tax liability" for a taxable year means the reported tax liability of a taxpayer, except that:

(A) for purposes of determining the final tax liability for a previous taxable year of less than twelve (12) months, the final tax liability shall be:

(i) the reported adjusted gross income tax liability; divided by

(ii) the number of estimated payments otherwise required under this chapter; multiplied by

(iii) four (4);

(B) if the taxpayer does not have a reported tax liability for the previous year and properly does not file an adjusted gross income tax return under IC 6-3 or financial institutions tax under IC 6-5.5, the taxpayer's final tax liability shall be considered to be zero dollars ($0); and

(C) if the taxpayer has a reported tax liability of zero dollars ($0) for the previous taxable year, the taxpayer shall be treated as having a tax liability of zero dollars ($0).

(2) "Reported tax liability" means the adjusted gross income tax under IC 6-3 or financial institutions tax under IC 6-5.5 as reported by the taxpayer for the taxable year on the taxpayer's return after application of any credits allowable to the taxpayer under IC 6-3-3, IC 6-3.1, or IC 6-5.5 other than credits for:

(A) estimated taxes paid under this section or IC 6-5.5-6-3;

(B) taxes withheld on behalf of the taxpayer under this chapter or IC 6-5.5-2-8; or

(C) taxes paid by a pass through entity on behalf of the taxpayer under IC 6-3-2.1.

The term reported tax liability includes the recapture of any tax credits under IC 6-3-3 or IC 6-3.1 reported on the tax return for the taxable year. If the taxpayer fails to file a tax return for a taxable year under IC 6-3 or IC 6-5.5, and the department determines that the taxpayer owes adjusted gross income tax under IC 6-3 or financial institutions tax under IC 6-5.5, the reported tax liability shall be the greater of the amount for the taxable year under IC 6-3 or IC 6-5.5 as determined by the department or the amount for the immediately following taxable year under IC 6-3 or IC 6-5.5.

     (b) Except as otherwise provided in this section, every corporation subject to the adjusted gross income tax liability imposed by this article shall be required to report and pay an estimated tax equal to twenty-five percent (25%) of such corporation's estimated adjusted gross income tax liability for the taxable year. The following apply:

(1) A taxpayer who uses a taxable year that ends on December 31 shall file the taxpayer's estimated adjusted gross income tax returns and pay the tax to the department on or before April 20, June 20, September 20, and December 20 of the taxable year.

(2) If a taxpayer uses a taxable year that does not end on December 31, the due dates for filing estimated adjusted gross income tax returns and paying the tax are on or before the twentieth day of the fourth, sixth, ninth, and twelfth months of the taxpayer's taxable year. The department shall prescribe the manner and forms for such reporting and payment.

(3) Any taxes withheld on behalf of the corporation under this chapter or IC 6-5.5-2-8, and any taxes remitted on behalf of the corporation under IC 6-3-2.1, shall be treated as estimated tax payments on behalf of the corporation for purposes of this section. Such taxes shall be attributed to each required payment in the manner the underlying income is attributed under Section 6655 of the Internal Revenue Code.

(4) If the taxpayer has a taxable year that is less than twelve (12) months, the estimated payments under this section shall be adjusted in the manner prescribed by Section 6655 of the Internal Revenue Code and applicable regulations.

     (c) If a corporation determines that its estimated tax payment using an annualized method under Section 6655(e) of the Internal Revenue Code is lower than the amount required under subsection (b), the corporation shall be permitted to use an annualized method under Section 6655(e) of the Internal Revenue Code to determine its estimated tax payment under subsection (b), and shall recapture any reduction in the estimated tax payment in the manner prescribed by Section 6655(e) of the Internal Revenue Code. The corporation may not use an annualized method under this section that would not be allowable to the corporation under Section 6655 of the Internal Revenue Code.

     (d) The penalty in the amount prescribed by IC 6-8.1-10-2.1(b) shall be assessed by the department on corporations failing to make payments as required in subsection (b). However, no penalty shall be assessed as to any estimated payments of adjusted gross income tax which equal or exceed:

(1) the amount calculated under subsection (b); or

(2) twenty-five percent (25%) of the final tax liability for the taxpayer's previous taxable year.

In addition, the penalty as to any underpayment of tax on an estimated return shall only be assessed on the difference between the actual amount paid by the corporation on such estimated return and the amount determined under subsection (b).

     (e) The provisions of subsection (b) requiring the reporting and estimated payment of adjusted gross income tax shall be applicable only to corporations having an adjusted gross income tax liability which exceeds two thousand five hundred dollars ($2,500) for its taxable year.

     (f) If the department determines that a corporation's:

(1) estimated quarterly adjusted gross income tax liability for the current year; or

(2) average estimated quarterly adjusted gross income tax liability for the preceding year;

exceeds five thousand dollars ($5,000), the corporation shall pay the estimated adjusted gross income taxes due by electronic funds transfer (as defined in IC 4-8.1-2-7) or by delivering in person or overnight by courier a payment by cashier's check, certified check, or money order to the department. The transfer or payment shall be made on or before the date the tax is due. A failure to make a payment in the manner prescribed under this subsection shall be subject to penalty as provided in IC 6-8.1-10-2.1(b)(5).

     (g) In the case of corporations that switch filing status, the final tax liability shall be determined in the manner consistent with Section 1502 of the Internal Revenue Code and regulations thereunder.

As added by P.L.205-2025, SEC.11.