IRS Waiver of Underwithholding, Underpayment Penalties Following TCJA
The IRS will waive the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.
The waiver is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments under the TCJA. It applies to those taxpayers who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.
In order to avoid a penalty, the usual percentage threshold is 90 percent. Taxpayers who paid less than 85 percent are not eligible for the waiver, and the penalty will be calculated as it normally would using the 90 percent threshold. The waiver will be integrated into commercially-available tax software and reflected in the forthcoming revision of Form 2210 and instructions. Click here
for more information.