Each estimated payment must equal at least 25 percent of the prior tax year’s franchise and excise tax liability, or 20 percent of the current year’s franchise and excise tax liability, whichever is lesser. For example, if a taxpayer’s liability was $10,000 in the prior year, and $11,000 in the current year, each estimated payment for the current year must equal at least $2,200 (the lesser of $2,500 (25 percent of $10,000) and $2,200 (20 percent of $11,000)).
Estimated payments that are late or deficient are subject to penalties and interest. A penalty of 2 percent of the unpaid amount is added for each month (or part of the month) that a payment is delinquent or deficient, up to a maximum of 24 percent. Interest is computed at the current rate of interest.