Form D 422 North Carolina PDF Details

When it comes to managing taxes, understanding the obligations and potential penalties related to underpayment is crucial. The D-422 form issued by the North Carolina Department of Revenue serves as a vital tool for individuals to determine whether they are subject to penalties for underpaying their estimated taxes. Applicable to those who have either failed to pay or have paid insufficient quarterly taxes, this form lays out a straightforward method for calculating the necessary catch-up payments to avoid or reduce penalties. With special provisions for farmers and fishermen, who have a unique payment deadline, and instructions for those with varying annual income, the form is designed to guide taxpayers through the process of rectifying their tax payments. Whether opting for the short method for precise penalty calculation—applicable under specific conditions such as equal quarterly payments without delay—or the regular method for more complex situations, the form includes detailed line-by-line instructions to ensure clarity. The D-422 form underlines the importance of accurate tax calculation and timely payment, highlighting the potential financial repercussions of underpayment and providing pathways to compliance for North Carolina taxpayers.

QuestionAnswer
Form NameForm D 422 North Carolina
Form Length2 pages
Fillable?No
Fillable fields0
Avg. time to fill out30 sec
Other namesd 422, UNDERPAYMENT, D--422, Annualized

Form Preview Example

(Rev. 12--98)

 

1998

Form D--422

NORTH CAROLINA DEPARTMENT OF REVENUE

 

UNDERPAYMENT OF ESTIMATED TAX BY INDIVIDUALS

Name(s) shown on tax return

Social Security Number

Instructions

Who Should Use This Form.--Use this form to see if you must pay a penalty for underpaying your estimated tax. Complete Part I to determine the required annual payment. Complete either Part II or Part III to determine the penalty that you owe. If you are a farmer or a fisherman and pay the tax due by March 1, 1999, do not file this form since you do not have to pay a penalty.

NOTE: If you were not required to file a 1997 North Carolina income tax return, STOP HERE. You do not owe the penalty and you do not have to complete this form.

Short Method

You may use the short method only if:

. You made no estimated tax payments (or your only payments were withheld North Carolina income tax); OR

. You paid estimated tax in four equal amounts on the due dates.

NOTE: If you made estimated tax payments, the short method will give the precise penalty amount only if your payments were made exactly on the due dates. If any payment was made earlier than the due date, you may use the short method, but using it may cause you to pay a larger penalty than the regular method. If the payment is only a few days early, the difference will generally be small. Do Not use the short method if you made any of your payments late. Important: A farmer or fisherman cannot use the short method to

determine the penalty since the penalty for a farmer or fisherman is determined in the last quarter only.

Regular Method

Use the regular method to figure the penalty if you are not eligible to use the short method. To use the regular method, complete Part I below and Part III on the back.

Line--By--Line Instructions

Line 6 -- If this line is less than $1,000, you do not owe a penalty and need not attach this form to your tax return.

Line 7 -- Figure your l997 tax by subtracting the tax credits on line 15 from the tax on line 12 of your 1997 return.

If you were required to file a return for 1997 but have not filed, do not complete this line. Instead, enter the amount from line 4 on line 8.

Line 16 -- If your income varies during the year, for example you receive unexpected or seasonal income not subject to withholding in April or later, you may be able to lower the amount of your penalty by completing Form D--422A, Annualized Income Installment Worksheet. If you annualized your income for any payment period, you must annualize it for all payment periods.

Line 17 -- Complete line 17 as follows:

. You are considered to have paid any

withheld State income tax evenly over the period you worked during the year unless you can show otherwise. If you worked all year, divide the total amount withheld by 4, and enter the result in each column.

. Include your estimated tax paid for each

payment period. Also include any 1997 overpayment of tax which you elected to apply to your 1998 estimated tax. If you file your return and pay the tax due by January 31, 1999, include on line 17, column (d), the amount of tax you pay with your return.

Line 23 -- If you do not show an underpayment on line 23 for columns (a), (b), (c), or (d), you need not attach this form to your tax return unless you annualized your income.

Line 25 -- Figure the number of days after the due date of an installment through December 31, 1998, or through the date the estimated tax was paid regardless of which installment the payment was for. For example, if line 23, column (a) shows an underpayment, any later payment of estimated tax is considered the date line 23, column (a) was paid to the extent of the underpayment. If December 31, 1998 is earlier, enter 260, 199, and 107 respectively in columns (a), (b), and (c).

Line 27 -- Enter the number of days after December 31, 1998, through the date the estimated tax payment was made, or through April 15, 1999, whichever is earlier. If April 15, 1999, is earlier, enter 105 in columns (a), (b), and

(c) and 90 in column (d).

Part I

Required Annual Payment -- All filers must complete this part.

1.

1998 tax from Form D--400, line 12

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

2.

Tax credits from 1998 Form D--400, line 15

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

3.

Subtract line 2 from line 1

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

4.

Multiply line 3 by 90% (.90) or 66 2/3% (.6667) for farmers and commercial fishermen

 

4.

 

 

 

5.

Withholding taxes from 1998, Form D--400, line 13a plus line 13b

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

6.

Subtract line 5 from line 3. If less than $1,000, stop here; do not complete or file this form. You do not owe the penalty . . . .

7.

Enter your 1997 tax (amount from line 12 less tax credit(s) claimed on line 15)

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

8.

Required annual payment. Enter the smaller of line 4 or line 7

 

. . . .

. . . . . . . . . . . . . . . . . . . . .

 

Note: If line 5 is equal to or more than line 8, stop here. You do not owe the penalty.

 

 

 

1.

2.

3.

5.

6.

7.

8.

Part II

Short Method -- Read the instructions for the Short Method before you complete this part. It cannot be used in all circumstances.

9.

Enter the amount, if any, from line 5 above

9.

 

 

10.

Enter the total amount, if any, of estimated tax payments you made

10.

 

 

11.

Add lines 9 and 10

11.

12.

Total underpayment for year. Subtract line 11 from line 8. (If zero or less, stop here; you do not owe

12.

 

the penalty)

 

 

13.

Multiply line 12 by .0575 and enter the result

 

 

 

13.

14.

.

If the amount on line 12 was paid on or after 4/15/99, enter --0--.

 

 

 

 

.

If paid before 4/15/99, make the following computation to find the amount to enter on line 14.

 

 

Amount on

 

Number of days paid before

 

 

 

 

 

X

X

.00022

14.

 

 

line 12

4/15/99

 

 

 

 

 

 

15.

PENALTY. Subtract line 14 from line 13.

Enter the result here and on line 17b of your income tax return,

 

 

Form D--400

15.

 

 

 

 

 

 

 

Form D--422 (1998)

Page 2

 

Part III

Regular Method

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section A -- Figure Your Underpayment

 

 

Payment Due Dates

 

 

 

(a)

(b)

(c)

(d)

 

 

 

 

4/15/98

6/15/98

9/15/98

1/15/99

16.Divide line 8 by 4 and enter the result in each column. Exception: If you use the annualized income install--

 

ment method, complete Form D--422A (Annualized

 

16.

 

 

17.

Income Installment Worksheet) and check this box.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated tax paid and tax withheld. For column (a) only,

 

 

 

 

 

 

 

 

 

 

 

 

enter the amount from line 17 on line 21. (If line 17 is

 

 

 

 

 

 

equal to or more than line 16 for each payment period,

17.

 

 

 

. . . .stop here; you do not owe the penalty.)

 

 

 

 

 

 

Complete lines 18 through 24 of one column before

 

 

 

 

 

 

going to the next column.

 

 

 

 

 

18.

Enter amount, if any, from line 24 of previous colum . . . .

18.

 

 

 

 

19.

 

 

19.

Add lines 17 and 18

 

 

20.

Add amounts on lines 22 and 23 of the previous column

 

 

and enter the result

20.

21.Subtract line 20 from line 19 and enter the result. If zero

or less, enter zero. (For column (a) only, enter the

 

amount from line 17)

21.

22.Remaining underpayment from previous period. If the

amount on line 21 is --0--, subtract line 19 from line 20

and enter the result. Otherwise, enter --0--

. . . . 22.

23. Underpayment. If line 16 is larger than or equal

to

 

line 21, subtract line 21 from line 16 and enter the

result. Enter 0 on line 18 of the next column and go to

line 19. Otherwise, go to line 24

. . . . 23.

24.Overpayment. If line 21 is larger than line 16, subtract

 

 

line 16 from line 21 and enter the result. Then go to

 

 

 

 

 

 

 

 

line 18 of next column. .

. . . . . . . . . . . . . . . . . . . .

. . . .

. . . . 24.

 

 

 

 

 

Section B Figure the Penalty (Complete lines 25 through 28 of one column before going to the next column)--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 15, 1998 December 31, 1998

 

 

 

 

 

 

 

 

 

 

 

 

4/15/98

6/15/98

9/15/98

 

 

 

 

 

 

 

 

 

 

 

 

 

25. Number of days after the date shown above line 25 through

 

Days:

Days:

Days:

 

 

 

the date the amount on line 23 was paid or

12/31/98,

 

 

 

 

 

 

 

whichever is earlier.

. . . .

. . . . . . . . . . . . . . . .

. . . . . . . . . .

25.

 

 

 

 

 

26.

Underpayment

X

 

Number of days

X

.09

 

 

 

 

 

 

 

on line 23

 

on line 25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(see instructions)

 

365

 

 

 

26.

$

$

$

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 1999

April 15, 1999

 

 

 

 

 

 

 

 

 

 

 

 

12/31/98

12/31/98

12/31/98

1/15/99

 

 

 

 

 

 

 

 

 

 

 

27. Number of days after the date shown above line 27 through

 

Days:

Days:

Days:

Days:

 

 

the date the amount on line 23 was paid or

4/15/99,

 

 

 

 

 

 

 

whichever is earlier.

. . . .

. . . . . . . . . . . . . . . .

. . . . . . . . . .

27.

 

 

 

 

 

28.

Underpayment

X

 

Number of days

X

.08

 

 

 

 

 

 

 

on line 23

 

on line 27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(see instructions)

 

365

 

 

 

28.

$

$

$

$

 

 

 

 

 

 

 

 

 

29.Penalty (add amounts on line 26 and 28). Enter here and on line 17b of your individual income tax return,

Form D--400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.