We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. These documents are classified as Revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.

Q&A with the Pennsylvania Department of Revenue

Scenario: A trust has been in existence for many years, but has never had income nor a need to file a return.

Nov 14, 2019
Q:

A trust has been in existence for many years, but has never had income nor a need to file a return. In the fourth quarter it received income for the first time. If the trust pays an estimated tax of greater than 90% of the annual tax by Jan.15, will there still be an underpayment of estimated tax penalty or can the Trust eliminate the penalty by calculating annualization?

A:

A trust should be able to qualify for an exception for estimated underpayment penalty using the annualization of income method if the estimated payments for the period or periods in question are made on a timely basis for the period the income is received.
 

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Disclaimer

These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.