(1) Except as provided in 15-30-2512, MCA, a taxpayer is required to pay at least 100 percent of their tax liability for the preceding tax year or 90 percent of their tax for the current tax year through withholding and estimated payments. If they do not, they will be liable for interest on the underpayment provided in 15-30-2512, MCA. In addition, unless the department grants a taxpayer an extension to pay an installment of estimated tax as provided in ARM 42.17.306, a taxpayer required to make installment payments of estimated tax who fails to timely pay an installment is liable for interest on the unpaid installment from the due date of the installment to the earlier of the date of payment or the due date of their income tax return, not including extensions, as provided in 15-1-216, MCA, and ARM 42.2.306.

(2) Taxpayers may complete the Form ESW, Montana Individual Estimated Income Tax Worksheet, to determine if they are required to make current year installment payments of estimated tax and, if necessary, to determine the amount. If a taxpayer's income fluctuates or is seasonal, employing the annualization method may lower the amount of one or more installments. A taxpayer using the optional annualization method must complete the Form ESA, Annualization Worksheet. Taxpayers are not required to file the estimated tax worksheet with their income tax return, but it is a tax record the taxpayer must retain and provide the department on request. Taxpayers using the annualization method must file Form ESA with their income tax return. If the taxpayer files their individual income tax return electronically, the Form ESA is a tax record the taxpayer must retain and provide the department on request.

(3) The department will provide taxpayers with estimated tax payment coupons on request. Unless paid electronically, as set forth in ARM 42.5.201 and 42.5.202, installment payments of estimated tax must be accompanied by a payment voucher and be:

(a) personally delivered to:

Montana Department of Revenue

Sam W. Mitchell Building

125 North Roberts, 3rd Floor

Helena, Montana; or

(b) mailed to:

Montana Department of Revenue

P.O. Box 6309

Helena, Montana 59604-6309.

(4) If a taxpayer has not received estimated tax payment vouchers from the department before the first installment due date, the payment should be accompanied by a written statement setting forth that the payment is an estimated tax payment, the tax year, the due date of the installment, and the taxpayer's name, mailing address, and social security number and be:

(a) personally delivered to:

Montana Department of Revenue

Sam W. Mitchell Building

125 North Roberts, 3rd Floor

Helena, Montana; or

(b) mailed to:

Montana Department of Revenue

P.O. Box 6308

Helena, Montana 59604-6308.

(5) Payment vouchers will be mailed to the taxpayer if a request for them is included with the first installment. Payments must be received by the department on or before the installment due date.

(6) Estimated tax payments are not required for a tax year shorter than four months. Individuals who have a short tax year of four months or more are required to pay estimated tax on the following dates:

(a) The first installment is due on April 15 or on the 15th day of the fourth month of the tax year;

(b) The second and third installments are due on the 15th day of the sixth month of the tax year and the 15th day of the ninth month of the tax year if the short tax year does not close prior to these dates; and

(c) The final installment is due on the 15th day of the first month of the succeeding tax year.

(7) If fewer than four installments are required, the applicable percentage of the required annual amount for each installment is increased. The applicable percentage per installment is as follows:

(a) 100 percent for one installment;

(b) 50 percent for two installments; and

(c) 33 1/3 percent for three installments.

 

 

Example 1: If the short tax year is the 10-month period from January 1 through October 31, the estimated tax must be paid in four installments, on April 15, June 15, September 15, and November 15. Each installment is 25 percent of the total payment required.

 

Example 2: If the short tax year is the 9-month period from January 1 through September 30, the estimated tax must be paid in three installments, on April 15, June 15, and October 15. With three installments, each installment is 33 1/3 percent of the total payment required.