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MyName
Level 3

Pennsylvania estimated tax

In Pennsylvania, what is the estimated tax based on? Is it like federal in that you can pay based on last year's tax paid? Last year I moved to PA in November and paid $2 in tax. Or do I have to figure out the new year's income for estimating tax?  

 

I find no real clarity of PA's safe harbor for estimated taxes. There is something about living a full year in PA last year, and it may be that moving mid-year means you cannot use the safe harbor.   

 

1 Best answer

Accepted Solutions
JotikaT2
Expert Alumni

Pennsylvania estimated tax

Since we cannot see your return, it's hard to answer your specific question.  We only know you paid $2 when you filed.  But we don't know what your full tax liability was on your PA tax return.

 

PA only states that you need to make estimated tax payments if your taxable income is $8,000.  

 

PA determines the safe harbor rule based upon a full year return being filed in the prior year.  As you had moved to PA last year, it will depend upon when you moved there and if you filed a full year return or a part-year resident state return to determine if the safe harbor rule would apply.

 

If you only had a tax liability of $2 last year, I would recommend estimating what your income is for the new year as it sounds like it will be higher than what you had in the prior year in order to avoid any potential underpayment penalties.

 

 

 

 

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4 Replies
JotikaT2
Expert Alumni

Pennsylvania estimated tax

It depends.

 

Pennsylvania (PA) requires estimated tax payments if you anticipate your taxable income from PA being $8,000 or more.  

 

To avoid any underpayment penalties, you would need to ensure you have paid in 100% of your prior year taxable income multiplied by the current year tax rate.

 

Please see the attached link for an example of the calculation.

 

PA estimated tax calculation example

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MyName
Level 3

Pennsylvania estimated tax

Thanks, but this does not answer my question.

JotikaT2
Expert Alumni

Pennsylvania estimated tax

Since we cannot see your return, it's hard to answer your specific question.  We only know you paid $2 when you filed.  But we don't know what your full tax liability was on your PA tax return.

 

PA only states that you need to make estimated tax payments if your taxable income is $8,000.  

 

PA determines the safe harbor rule based upon a full year return being filed in the prior year.  As you had moved to PA last year, it will depend upon when you moved there and if you filed a full year return or a part-year resident state return to determine if the safe harbor rule would apply.

 

If you only had a tax liability of $2 last year, I would recommend estimating what your income is for the new year as it sounds like it will be higher than what you had in the prior year in order to avoid any potential underpayment penalties.

 

 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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MyName
Level 3

Pennsylvania estimated tax

Thank you !!!

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