Note: For taxable years beginning on or after January 1, 1994, and ending before April 1, 1999, estimated tax includes the temporary recycling surcharge under s. 77.93, Stats.
Note: Refer to the examples of the estimated tax payment requirements for short taxable years involving a portion of a month that follow sub. (7) (b) 4.
Example: Corporation A receives federal approval to change its taxable year from a calendar year to a fiscal year ending on June 30. To make the change, Corporation A files a franchise or income tax return for the period beginning January 1 and ending June 30. On this short-period return, it reports net tax of $8,000. Corporation A's Wisconsin net income for the current taxable year is less than $250,000. Therefore, its estimated tax payable is the lesser of 90% of the tax shown on its current year return or 100% of the tax shown on its prior year return, provided it had filed a tax return for that year covering a 12-month period. The tax shown on Corporation A's return for the preceding taxable year, a 12-month period, was $6,000. Corporation A's estimated tax payable for the current taxable year is $3,000, $6,000 prior year's tax x 6 months/12 months.
Note: Corporations having Wisconsin net income of $250,000 or more for the current taxable year and estates or trusts having Wisconsin taxable income of $20,000 or more for the current taxable year may not calculate their estimated tax payable under par. (b).
Examples:
Examples:
Example: Corporation J's taxable year begins January 1 and ends May 10. It has Wisconsin net income of $200,000 for the period from January 1 through February 28. Corporation J's annualization factor for that period is 2.5, calculated by dividing the 5 months of the taxable year by the 2 months of the annualization period. The annualized income for that period is $500,000, which is $200,000 Wisconsin net income x 2.5 annualization factor.
Example: Corporation K, a calendar year filer, merges into Corporation L on July 14. Corporation K elects the annualized income method for determining whether it paid sufficient estimated tax. Corporation K's Wisconsin net income is $300,000 for the first 2 months of the taxable year, $1,400,000 for the first 5 months of the taxable year, and $1,800,000 for the first 6 months of the taxable year. Corporation K has $9,000 of tax credits and its net tax due for the year ending July 14 is $135,000. Therefore, Corporation K's estimated tax payable is $121,500. For Corporation K's 7-month year, the annualization factors are 3.5 (7 months/2 months), 1.4 (7 months/5 months), and 1.167 (7 months/6 months). Corporation K calculates its required estimated tax payments as follows:
First 2 months | First 5 months | First 6 months | |
Wisconsin net income | $300,000 | $ 1,400,000 | $1,800,000 |
Annualization factor | 3.5 | 1.4 | 1.167 |
Annualized income | $1,050,000 | $ 1,960,000 | $2,100,600 |
Annualized gross tax | 82,950 | 154,840 | 165,947 |
Tax credits | 9,000 | 9,000 | 9,000 |
Annualized net tax | $ 73,950 | $ 145,840 | $156,947 |
Applicable percentage | 22.5% | 45% | 90% |
Portion of annualized tax | $ 16,639 | $65,628 | $141,252 |
25% of estimated tax | 30,375 | 60,750 | 121,500 |
Amount payable in preceding periods | 0 | 16,639 | 60,750 |
Installment payable | $ 16,639 | $44,111 | $ 60,750 |
Note: After the end of the taxable year, persons other than corporations shall use schedule U and corporations shall use form 4U to determine whether they have made sufficient estimated tax payments. Taxpayers with short taxable years shall adjust the computations on those forms as provided in this section.
Wis. Admin. Code Department of Revenue Tax 2.89
See s. Ta x 2.66 for rules relating to the payment of estimated taxes by combined groups.
Note: Section Tax 2.89 interprets ss. 71.09(9), 71.255(7), and 71.29(5), Stats.
See s. Tax 2.60 for combined reporting definitions relating to this section. See s. Tax 2.63 for rules relating to the controlled group election under s. 71.255(2m), Stats. See s. Tax 2.65 for rules relating to the designated agent. See s. Tax 2.66 for rules relating to the payment of estimated taxes by combined groups.