                                 CODE OF VIRGINIA

FAILURE BY INDIVIDUAL, TRUST OR ESTATE TO PAY ESTIMATED TAX (§ 58.1-492)

A. In the case of any underpayment of estimated tax by an individual, trust or
estate, except as provided in subsection C, there shall be added to the tax
under this chapter for the taxable year an amount determined at the rate
established for interest, under § 58.1-15, upon the amount of the underpayment
(determined below), for the period of the underpayment (determined under
subsection B). The amount of such addition to the tax shall be reported and paid
at the time of filing the individual income tax return or the fiduciary income
tax return for the taxable year.
			The amount of the underpayment shall be the excess of:

   1. The amount of the installment which would be required to be paid if the
   estimated tax were equal to ninety percent (sixty-six and two-thirds percent
   in the case of an individual referred to in &#xA7; 58.1-490 F, relating to
   income from farming) of the tax shown on the return for the taxable year, or
   if no return was filed, ninety percent (sixty-six and two-thirds percent in
   the case of individuals referred to in &#xA7; 58.1-490 F, relating to income
   from farming) of the tax for such year; or 100 percent of the tax shown on the
   return of the taxpayer for the preceding taxable year, whichever is less, over

   2. The amount, if any, of the installment paid on or before the last date
   prescribed for such payment.

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

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

   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 A 1 for such installment date.

C. Notwithstanding the provisions of subsections A and B, the addition to the
tax with respect to any underpayment of any installment shall not be imposed if
the total amount of all payments of estimated tax made on or before the last
date prescribed for the payment of such installment equals or exceeds whichever
of the following is the lesser:

   1. The amount which would have been required to be paid on or before such date
   if estimated tax were whichever of the following is the least:
   				a. The tax shown on the return of the individual, trust or estate for the
   preceding taxable year, if a return showing a liability for tax was filed by
   the individual, trust or estate for the preceding taxable year and such
   preceding year was a taxable year of twelve months;
   				b. An amount equal to the tax computed, at the rates applicable to the
   taxable year, on the basis of the taxpayer&#8217;s status with respect to
   personal exemptions for the taxable year, otherwise on the basis of the facts
   shown on his return for, and the law applicable to, the preceding year; or
   				c. An amount equal to ninety percent (sixty-six and two-thirds percent in
   the case of individuals referred to in § 58.1-490 F, relating to income from
   farming) of the tax for the taxable year computed by placing on an annualized
   basis the taxable income for the months in the taxable year ending before the
   month in which the installment is required to be paid. For purposes of this
   paragraph the taxable income shall be placed on an annualized basis by:

      i. Multiplying by twelve (or, in the case of a taxable year of less than
      twelve months, the number of months in the taxable year) the taxable income
      (computed without deduction of personal exemptions) for the months in the
      taxable year ending before the month in which the installment is required to
      be paid, or, for a trust or estate, the months in the taxable year ending
      before the date that is one month before the month in which the installment
      is required to be paid;

         ii. Dividing the resulting amount by the number of months in the taxable
         year ending before the month in which such installment date falls, or, for
         a trust or estate, the months in the taxable year ending before the date
         that is one month before the month in which the installment is required to
         be paid; and

         iii. Deducting from such amount the deductions for personal exemptions
         allowable for the taxable year (such personal exemptions being determined
         as of the last date prescribed for payment of the installment); or

   2. An amount equal to ninety percent of the tax computed, at the rates
   applicable to the taxable year, on the basis of the actual taxable income for
   the months in the taxable year ending before the month in which the
   installment is required to be paid.

D. For purposes of applying this section:

   1. The estimated tax shall be computed without any reduction for the amount
   which the individual estimates as his credit under &#xA7; 58.1-480 (relating
   to tax withheld at source on wages);

   2. The amount of the credit allowed under &#xA7; 58.1-480 for the taxable year
   shall be deemed a payment of estimated tax, and an equal part of such amount
   shall be deemed paid on each installment date (determined under &#xA7;
   58.1-491) for such taxable year, unless the taxpayer establishes the dates on
   which all amounts were actually withheld, in which case the amounts so
   withheld shall be deemed payments of estimated tax on the dates on which such
   amounts were actually withheld; and

   3. There shall be no addition to tax imposed for underpayment of estimated tax
   of $1,000 or less for the taxable year.

E. The application of this section to taxable years of less than twelve months
shall be in accordance with regulations prescribed by the Tax Commissioner.

HISTORY: Code 1950, § 58-151.23; 1962, c. 612; 1972, c. 827; 1977, c. 396;
1983, c. 575; 1984, c. 675; 1985, c. 221; 1987, cc. 484, 599, 611; 1990, c. 335;
1991, cc. 362, 456; 2000, c. 388; 2025, c. 725.