I applied a large enough portion of my 2024 Federal tax overpayment to my 2025 estimated tax to equal my total 2024 tax. Will this satisfy the IRS rule (from Pub. 505) that estimated tax payments are not required if my "income tax withholding and refundable credits will be at least 100% of the tax shown on the 2024 return"? I anticipate that my 2025 income will be greater than 2024 and need to know if I need to make estimated payments based on the higher income. Obviously, I don't want to if I don't need to.
Yes, the amount of your 2024 refund that you apply to your 2025 counts as estimated tax payments and will satisfy the IRS rule that estimates are not required if you have paid in 100% of your 2024 tax.
Note for higher income taxpayers:
If your AGI for 2024 was more than $150,000 ($75,000 if your filing status for 2025 is married filing a separate return), substitute 110% for 100%.
[Edited 04/16/25|5:39pm PST]
"income tax withholding and refundable credits will be at least 100% of the tax"
This rule applies to withholding only, not estimated tax payments.
Your action is sufficient if your 2024 AGI was below $150,000. Otherwise the prior years tax must be multipled by 1.10 (110%)
"satisfy the IRS rule that estimates are not required if you have paid in 100% of your 2024 tax."
Unfortunately, this is not the whole story.