Safe harbor for estimated taxes?

[eagle99]

I sold property June of 2023. I'll have a 6 figure tax liability even after the 250k exclusion, cost basis, etc... I'd like to delay paying the tax due to continue earning investment money on it. Self-employed 2022 (no withholding) and made very little money paying only $210 federal, $0 CA (state).  The tax code regarding estimated taxes says:

"General rule. The total amount you must pay is the smaller of:
1. 90% of your total expected tax for 2023, or
2. 100% of the total tax shown on your 2022 return. Your 2022 tax return must cover all 12 months."

In California, for 2023, estimated taxes for the 1st 3 quarters is due Oct 16, 2023 due to disaster. Do I have safe harbor and can really pay 100% of my federal 2022 return ($210) and nothing for California by October 16th and not incur a penalty, then pay the huge amount by April 15, 2024? I would like to continue investing that tax liability amout for 6 additional months, but I don't want to incur underpayment penalties or create more risk for audit. Thanks for your thoughts and advice!

[Critter-3 · Accepted solution]

Yes you are reading the general rule correctly... pay 100% of the prior year tax liability. 

[eagle99]

Thank you so much for your reply. I'm now seeing that California has limitations on AGI for BOTH prior and current year.  Federal for prior year looks similar, but does federal have something similar for current year for 2023 estimated taxes? I didn't find anything...

From California tax board:

"If you’re required to make estimated tax payments and your prior year California adjusted gross income is more than:

• $150,000
• $75,000 if married/RDP filing separately

Then you must base your estimated tax based on the lesser of:

• 90% of your tax for the current tax year
• 110% of your tax for the prior tax year (including alternative minimum tax)

High income estimated tax

If your current tax year's adjusted gross income for California is equal to or greater than:

• $1,000,000
• $500,000 if married/RDP filing separately

You must pay your estimated tax based on 90% of your tax for the current tax year.