Virginia Law

The period of the underpayment shall run from the date the installment was required to be paid to the earlier of the following dates:

1. May 1, if a calendar year, or the 15th day of the fourth month following the close of the taxable year, if a fiscal year, or

2. With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this subdivision, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under subdivision 1 of 23VAC10-115-161 for such installment date.

3. Example: The principles of 23VAC10-115-160, 23VAC10-115-161, and 23VAC10-115-162 may be illustrated by the following: On or before May 1, 1988, the trustee of The Jones Trust could reasonably expect the fiduciary's Virginia tax liability for calendar year 1988 to exceed $150. Therefore, the trustee timely makes four installment payments: $1,500 on May 1, 1988, and June 15, 1988, and $2,000 on September 15, 1988, and January 15, 1989. When the fiduciary income tax return is filed on May 1, 1989, the tax liability is $10,000. The total paid ($7,000) is less than 90% of the tax ($9,000). Therefore, an addition to the tax in the amount of $174.56 is due, computed as follows:

 INSTALLMENT                       1st       2nd       3rd       4th

 AMOUNT OF UNDERPAYMENT                                             

 90% of the tax / 4           2,250.00  2,250.00  2,250.00  2,250.00

 Actual Payment               1,500.00  1,500.00  2,000.00  2,000.00

 Underpayment                   750.00    750.00    250.00    250.00

 PERIOD OF UNDERPAYMENT                                             

 Date due                       5/1/88   6/15/88   9/15/88   1/15/89

 Date Paid                      5/1/89    5/1/89    5/1/89    5/1/89

 No. of days (total)               365       320       228       106

 No. of days underpayment is                                        

 subject to each rate                                               

 4/1/88 - 6/30/88 at 10%            60        15         0         0

 7/1/88 - 9/30/88 at 10%            92        92        15         0

 10/1/88 - 12/31/88 at 11%          92        92        92         0

 1/1/89 - 5/1/89 at 11%            121       121       121       106

 ADDITION TO THE TAX                                                

 4/1/88 - 6/30/88 at 10%         12.33      3.08      0.00      0.00

 7/1/88 - 9/30/88 at 10%         18.90     18.90      1.03      0.00

 10/1/88 - 12/31/88 at 11%       20.79     20.79      6.93      0.00

 1/1/89 - 5/1/89 at 11%          27.35     27.35      9.12      7.99

 Total addition = 174.56         79.37     70.12     17.08      7.99