I am pretty sure that, for the IRS, you will owe no penalties as long as you pay 100% of your prior year's tax liability and that is some sort of 'safe haven' for those who cannot predict their current years' income until very late in the year (or even by January 15th, I suppose). I believe that 100% factor rises to 110% if your income (last year's, I assume) exceeds some high threshold, and might even be higher (or inapplicable) if one's income is in the millions. Perhaps someone who knows IRS tax law can chime in and confirm or correct what I just said.
As I understand it, in that regard, California tax law follows the IRS law, so I believe the same rule applies. If so, everything was easy until California decided it needed to collect more of the tax liability earlier in the year and added this 30%/40%,0%/30% tax payment profile. So, my question is how these two provisions interact? I am hoping that what then happens is that, for example for the 2nd quarter, there will be no California tax penalties as long as one pays 70% of the prior year's state tax liability, or 70% x 110% = 77% of it, if one was in a high tax bracket in the prior year, etc.
