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NJ Income Tax – Interest on Underpayment of Estimated Tax

New Jersey’s income tax is a “pay as you go” tax. You must pay the tax as you earn or receive income throughout the year.

When you fail to pay any required estimated payments during the year and the balance of tax due with your final return is more than $400, interest charges will be assessed on the underpayment even if you pay all the tax due by the return due date (April 15th for calendar year filers). If any required estimated payment is not made, interest is charged from the quarterly payment's due date to the date the tax is paid. If required estimated payments are filed late, interest charges will be assessed on the underpayment from the due date of the payment to the actual payment date.

Interest is assessed at the annual rate of 3% above the prime rate. At the end of each calendar year any tax, penalties, and interest still due become part of the balance on which interest is charged.

Request Form NJ-2210, Underpayment of Estimated Tax by Individuals, Estates or Trusts, to determine if interest is due on the underpayment of estimated tax and, if so, to calculate the amount.

Technical Bulletin TB-21(R) shows the current interest rate and the interest rate history for recent years.

Additional information Concerning Estimated Tax for Taxpayers Earning Over $150,000 is also available.

Last Updated: Tuesday, 02/07/17

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