0001| AN ACT | 0002| RELATING TO TAXATION; AMENDING THE INCOME TAX ACT TO REQUIRE | 0003| ESTIMATED INCOME TAX PAYMENTS OF CERTAIN TAXPAYERS; ENACTING A | 0004| NEW SECTION OF THE NMSA 1978. | 0005| | 0006| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: Section 1. A new section of the Income Tax Act is enacted to read: | 0007| "ESTIMATED TAX DUE--PAYMENT OF ESTIMATED TAX--PENALTY.-- | 0008| A. Except as otherwise provided in this section, every individual who is required | 0009| to file an income tax return under the Income Tax Act shall pay the required annual payment in | 0010| installments. The amount of any required installment shall be twenty-five percent of the | 0011| required annual payment. | 0012| B. For the purposes of this section: | 0013| (1) "required annual payment" means the lesser of: | 0014| (a) ninety percent of the tax shown on the return of the taxable | 0015| year or, if no return is filed, ninety percent of the tax for the taxable year; or | 0016| (b) one hundred percent of the tax shown on the return for the | 0017| preceding taxable year if the preceding taxable year was a taxable year of twelve months and the | 0018| taxpayer filed a tax return for that preceding taxable year; and | 0019| (2) "tax" means the tax imposed under Section 7-2-3 NMSA 1978 less | 0020| any amount allowed for credits provided by Sections 7-2-13 and 7-2-18.1 through 7-2-18.4 | 0021| NMSA 1978 and for any applicable tax rebates provided by the Income Tax Act. | 0022| C. There shall be four required installments for each taxable year. For taxpayers | 0023| reporting on a calendar year basis, the due dates for the installments are April 15, June 15, | 0024| September 15 and January 15 of the following taxable year. For taxpayers reporting on a fiscal | 0025| year other than a calendar year, the due dates for the installments are the fifteenth day of the | 0001| fourth, sixth and ninth months of the fiscal year and the fifteenth day of the first month | 0002| following the fiscal year. | 0003| D. For the purposes of applying this section, the amount of tax deducted and | 0004| withheld with respect to a taxpayer under the Withholding Tax Act shall be deemed a payment | 0005| of estimated tax. An equal part of the amount of withheld tax shall be deemed paid on each due | 0006| date for the applicable taxable year unless the taxpayer establishes the dates on which all | 0007| amounts were actually withheld, in which case the amounts withheld shall be deemed payments | 0008| of estimated tax on the dates on which the amounts were actually withheld. The taxpayer may | 0009| apply the provisions of this subsection separately to wage withholding and any other amounts | 0010| withheld under the Withholding Tax Act. | 0011| E. Except as otherwise provided in this section, in the case of any underpayment | 0012| of estimated tax by a taxpayer, there shall be added to the tax an amount as penalty determined | 0013| by applying the rate specified in Subsection B of Section 7-1-67 NMSA 1978 to the amount of | 0014| the underpayment for the period of the underpayment, provided: | 0015| (1) the amount of the underpayment shall be the excess of the amount of | 0016| the required installment over the amount, if any, of the installment paid on or before the due date | 0017| for the installment; | 0018| (2) the period of the underpayment runs from the due date for the | 0019| installment to whichever of the following dates is earlier: | 0020| (a) the fifteenth day of the fourth month following the close of the | 0021| taxable year; or | 0022| (b) with respect to any portion of the underpayment, the date on | 0023| which the portion was paid; and | 0024| (3) for the purposes of Subparagraph (b) of Paragraph (2) of this | 0025| subsection, a payment of estimated tax shall be credited against unpaid required installments in | 0001| the order in which the installments are required to be paid. | 0002| F. No penalty shall be imposed under Subsection E of this section for any taxable | 0003| year if: | 0004| (1) the difference between the following is less than five hundred dollars | 0005| ($500): | 0006| (a) the tax shown on the return for the taxable year or, when no | 0007| return is filed, the tax for the taxable year; and | 0008| (b) any amount withheld under the provisions of the Withholding | 0009| Tax Act for that taxpayer for that taxable year; | 0010| (2) the individual's preceding taxable year was a taxable year of twelve | 0011| months, the individual did not have any tax liability for the preceding taxable year and the | 0012| individual was a resident of New Mexico for the entire taxable year; or | 0013| (3) the secretary determines that the underpayment was not due to fraud, | 0014| negligence or disregard of rules and regulations. | 0015| G. If, on or before January 31 of the following taxable year, the taxpayer files a | 0016| return for the taxable year and pays in full the amount computed on the return as payable, then | 0017| no penalty under Subsection E of this section shall be imposed with respect to any underpayment | 0018| of the fourth required installment for the taxable year. | 0019| H. This section shall be applied to taxable years of less than twelve months in the | 0020| manner determined by regulation or instruction of the secretary. | 0021| I. Except as otherwise provided in Subsection J of this section, this section | 0022| applies to any estate or trust. | 0023| J. This section does not apply to any trust that is subject to the tax imposed by | 0024| Section 511 of the Internal Revenue Code or that is a private foundation. With respect to any | 0025| taxable year ending before the date two years after the date of the decedent's death, this section | 0001| does not apply to: | 0002| (1) the estate of the decedent; or | 0003| (2) any trust all of which was treated under Subpart E of Part I of | 0004| Subchapter J of Chapter 1 of the Internal Revenue Code as owned by the decedent and to which | 0005| the residue of the decedent's estate will pass under the decedent's will or, if no will is admitted | 0006| to probate, that is the trust primarily responsible for paying debts, taxes and expenses of | 0007| administration." | 0008| Section 2. APPLICABILITY.--The provisions of this act apply to taxable years | 0009| beginning on or after January 1, 1997. | 0010| |