If you owe more than $1,000, a penalty is generally added to your tax bill for underpayment throughout the year. The Indiana instructions in IT-40 Booklet state on page 9:
Generally, if you owe $1,000 or more in state and county tax for the year that’s not covered by withholding taxes, you need to be making estimated tax payments. You might owe this penalty if:
• The total of your credits, including timely made estimated tax payments, is less than 90% of this year’s tax due or 100% of last year’s tax due, ** or
• You underpaid the minimum amount due for one or more of the installment periods.
If either of these cases apply to you, you must complete Schedule IT-2210 or IT-2210A to see if you owe a penalty or if you meet an exception.
• If you owe this penalty, complete Schedule IT-2210 or IT-2210A and write the penalty amount on Form IT-40, line 20.
• If you meet an exception, complete Schedule IT-2210 or IT-2210A to show which exception was met
Since your income was primarily at the end of the year, you will want to use IT2210-A, as described on page 10 and annualize your income to reduce your penalty.
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