Connecticut General Statutes 12-517c – Interest added when estimated payment on dividends, interest income or capital gains is less than minimum required
(a) In addition to the tax imposed on dividends, interest income and gains from the sale or exchange of capital assets under this chapter with respect to any taxable year, any taxpayer subject to said tax who has not, as provided in section 12-517a, made payment (1) on account of the tax applicable to dividends and interest income for such taxable year, on or before the fifteenth day of the sixth month of such taxable year, of an installment at least equal to the lesser of (A) fifty per cent of the estimated tax for such taxable year, which estimated tax for purposes of this section may not be less than ninety per cent of the tax determined to be due for such taxable year or (B) sixty per cent of the assumed tax with respect to dividends and interest income for such taxable year, (2) on account of the tax applicable to gains from the sale or exchange of capital assets for such taxable year, on or before the fifteenth day of the sixth month of such taxable year, in an amount at least equal to the lesser of (A) one hundred per cent of the tax with respect to all such gains earned, received in fact or constructively, accrued or credited to the taxpayer during the first five full months of such taxpayer’s taxable year, as provided in subdivision (2) of subsection (a) of section 12-517a or (B) sixty per cent of the assumed tax with respect to gains from the sale or exchange of capital assets for such taxable year, or (3) on account of the tax applicable to dividends, interest income and gains from the sale or exchange of capital assets for such taxable year, on or before the fifteenth day of the second month following the end of such taxable year, in an amount which, together with any prior payments on account of such tax, is at least equal to the lesser of (A) one hundred per cent of such estimated tax, which for purposes of this section may not be less than ninety per cent of the tax determined to be due for such taxable year or (B) one hundred per cent of the assumed tax with respect to such taxable year, shall on or before the due date for filing the final return for such taxable year prescribed in section 12-508 pay to the commissioner interest on the part of any such installment not so paid, at the rate of one and one-fourth per cent per month, or fraction thereof, from the aforementioned date relating to the installment to the date of payment. For purposes of this subsection the term “assumed tax” means the amount obtained by computing with respect to the taxpayer a tax at the rates applicable to such taxable year but on the basis of all other facts relating to the taxpayer for, and all other provisions of law applicable to, the next preceding taxable year.
Terms Used In Connecticut General Statutes 12-517c
- adjusted gross income: means adjusted gross income for the taxable year of any taxpayer as determined for purposes of the federal income tax, but exclusive of any social security or tier 1 railroad retirement benefits included in the taxpayer's total adjusted gross income for such taxable year. See Connecticut General Statutes 12-505
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- commissioner: means the Commissioner of Revenue Services. See Connecticut General Statutes 12-505
- dividends: means those dividends taxable for federal income tax purposes without regard to the dividend exclusion, but exclusive of exempt dividends. See Connecticut General Statutes 12-505
- gains from the sale or exchange of capital assets: means (A) net gain as determined for federal income tax purposes, after due allowance for losses and holding periods, and with respect to any such gain which is earned, received in fact or constructively, accrued or credited to the taxpayer on or after January 1, 1987, but not later than February 8, 1989, deduction of sixty per cent of the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such taxable year, from (i) sales or exchanges of capital assets or assets treated as capital assets, other than notes, bonds or other obligations of the state of Connecticut or any of the political subdivisions thereof, or its or their respective agencies or instrumentalities, or (ii) from transactions or events taxable to the taxpayer as such sales or exchanges, and being the net amount includable in the taxpayer's adjusted gross income, with respect to all such sales, exchanges, transactions, or events, under the provisions of the internal revenue code in effect for the taxable year, exclusive of any gain or loss from the holding or trading of any dealer equity options, as defined in Section 1256 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and exclusive of any gain or loss of a nonresident taxpayer other than from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset and (B) net gains from sales or exchanges of certain property, as determined in accordance with Internal Revenue Service Form 4797, exclusive of any such net gain includable under subparagraph (A) in this definition of gains from the sale or exchange of capital assets. See Connecticut General Statutes 12-505
- interest income: means (A) any interest income taxable for federal income tax purposes, exclusive of any such income with respect to which taxation by any state is prohibited by federal law, less any amounts forfeited to a bank, savings bank, savings and loan association, credit union or other depository institution, wherever located, as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit, or similar class of deposit, and (B) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state of Connecticut. See Connecticut General Statutes 12-505
- month: means a calendar month, and the word "year" means a calendar year, unless otherwise expressed. See Connecticut General Statutes 1-1
- taxable year: means the same accounting period as the taxpayer's taxable year for federal income tax purposes or that portion of such year as either commences when the taxpayer becomes a resident or ends when the taxpayer ceases to be a resident of this state. See Connecticut General Statutes 12-505
- Taxpayer: means (A) a husband and wife both of whom are residents in this state, whether or not they file for the taxable year a single federal income tax return jointly, and (B) each and every other individual who is a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of capital assets, or from dividends or interest income subject to tax under this chapter and any husband and wife when either of such husband or wife, or both, are not residents in this state and who file for the taxable year a single federal income tax return jointly, and each and every other individual who is not a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset. See Connecticut General Statutes 12-505
(b) If any part of the interest referred to in subsection (a) of this section with respect to tax for any taxable year is not paid to the commissioner on or before the due date for filing the final return for such taxable year prescribed in said section 12-508, such unpaid interest shall be added to the tax imposed under section 12-506 for such taxable year.
(c) If any installment payment, as required in section 12-517a, is less than the minimum amount required under this section for such income year, a penalty shall be imposed with respect to such payment in the amount of ten per cent of the part of such installment which is less than such minimum amount, or fifty dollars, whichever amount is greater.
(d) The commissioner shall waive any penalty applicable with respect to gains from the sale or exchange of capital assets earned, received in fact or constructively, accrued or credited to a taxpayer, in the calendar year commencing January 1, 1989, whose adjusted gross income, reduced by the amount of any such gains, is less than fifty-four thousand dollars.