The general rule states I only have to pay estimated taxes if both of these two conditions are met:
- You expect to owe at least $1,000 (or $500 for state) in tax for 2021, after subtracting your withholding and refundable credits.
- You expect your withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your 2021 tax return OR
- 100% of the tax shown on your 2020 tax return. (its 110% if your AGI was over $150,000)
The first point is met for both federal and state, but the second point is what is making me confused.
For state taxes: (taking into account standard deduction)
My expected withholding for this year is ~$1400. 90% of my expected tax for my 2021 tax return is ~$3000. The tax shown on my 2020 tax return is ~$900. Because $900 is smaller than $3000, the second point will refer to $900. Because $1400 is greater than $900, I don't meet the second point. I assume this means I don't have to pay estimates to the state. (I understand I still owe the tax next April)
assuming your 2020 Federal AGI was less than $150K then the 2021 federal withholding you need is $900 or more (provided the $900 above is only referring to your federal tax liability). since you estimate your federal withholding to be about $1400 no federal estimates are required.
you didn't provide your state, your state's 2020 AGI, your actual 2020 or estimated 2021 state tax liability or your 2021 state withholding. so we can't say whether state estimates are needed.
the requirements for each are computed separately. you can't mix state numbers with federal numbers.
