Do I have to pay estimated tax in 2016?
Estimated tax is a method used to pay tax on income when your withholding and credits do not cover your tax liability. You have to make estimated Ohio income tax payments for year 2016 only if the sum of (i) your year 2015 overpayment credited to year 2016 and (ii) your year 2015 Ohio income tax withholding is not equal to or greater than either of the following:
- 100% of the year 2015 Ohio income tax OR
- 90% of the year 2016 tax.
For purposes of these tests, you must reduce your year 2015 overpayment credited to year 2016 by any year 2015 tax payment that you made after April 18, 2016.
If you don't meet either of the tests above, you must timely pay enough estimated Ohio income tax so that the sum of (i) your year 2015 overpayment credited to year 2016, (ii) your year 2016 withholdings and (iii) your timely made estimated Ohio income tax payments is not less than either of the two tests above.
Common examples of income sources that make quarterly estimated payments necessary are self-employment income, pensions, commissions, lump sum payments, capital gains, dividends, interest, alimony received or other sources of income not subject to withholding.
If you are required to make estimated payments and do not, you may be subject to an interest penalty on your underpayment of estimated taxes.
If you estimate that you will owe more than $500 in tax for 2016 (after subtracting your estimated withholding and credits), then you should make quarterly estimated payments. Quarterly estimated payments can be made electronically on our Web site at tax.ohio.gov. Or you can obtain payment vouchers for Ohio IT 1040ES or SD 100ES from our Web site at tax.ohio.gov.
To assist taxpayers in determining their estimated payments, a complete set of tax rates through 2015 is available on this Web site.
CAUTION: If you are required to make estimated payments and do not, you may be subject to an interest penalty on your underpayment of estimated taxes. Use Ohio form IT 2210, long and short method, to calculate the interest penalty on your underpayment amount.
2016 Payment Due Dates:
1st Quarter - April 18, 2016
2nd Quarter - June 15, 2016
3rd Quarter - Sept. 15, 2016
4th Quarter - Jan. 17, 2017
TIP: If you don't want to make estimated payments, you may increase the amount of Ohio tax your employer withholds from your wages. To do this, file with your employer a revised Ohio form IT 4 (Employer Withholding Exemption Certificate).