do i still need to pay 2022 estimate taxes after applying my 2021 tax refund to estimated taxes?

LP1968 · ‎August 22, 2022

I am about to file my 2021 tax rerun and plan to apply my (approximately $2,000) tax refund to the 2022 estimated taxes. However, my Q3 2022 estimated taxes may need to be more than the 2021 refund amount...

On Sept. 15, do I need to pay the just the difference as Q3 2022 estimated taxes? the full amount (since my 2021 return may not have been processed by Sept. 15? or nothing more until Q4 2022 estimated taxes (if any)?

Also, are the rules the same both for Federal and CA-state refunds applied to the 2022 estimated taxes? or different?

please advise. Thanks.

tagteam · ‎August 23, 2022

See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

fanfare · ‎August 23, 2022

Generally, refunds applied to next year go toward the first estimated tax payment ( in this case, April 15, 2022).

@LP1968

NCperson · ‎August 23, 2022

@LP1968 - you can reduce your Sept 15 estimated payment by the amount of your 2021 refund that you are requesting be rolled to the 2022 tax return.

What @fanfare means is that when the IRS calculates whether or not you owe a penalty for 2022 (and the whole idea of the estimated payments is to avoid that!), the IRS will credit the 2021 refund as being received on April 15, 2021 and not on the day you settled your 2021 tax return - that is to your benefit.

View solution in original post

LP1968 · ‎August 23, 2022

Thanks a lot @NCperson very helpful!

Just one clarification: does the same logic apply also for estimate taxes to CA-state?

Thanks again!

KristenParrish · ‎September 30, 2022

Thanks for answering it.

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do i still need to pay 2022 estimate taxes after applying my 2021 tax refund to estimated taxes?

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