Estimated Tax Series Part 3: How to Pay Estimated Taxes

May 31, 2017

woman with produce standThis is part three of a series about estimated taxes. Part One discusses estimated tax and who needs to pay them, and Part Two discusses how to figure the amount of estimated tax you need to pay.

How do you pay?

There are a few options available to make estimated tax payments.

  • Online - Beginning with the 2017 quarterly payments, estimated payments transition to the department’s new electronic payment portal called DORpay.

DORpay will function similar to the ePay system but will have a new look and feel that matches the department’s other online systems. Taxpayers will continue to make estimated tax payments using the same process as ePay.

  • Form ES-40 – You also can download Form ES-40 and submit it by mail to the department, along with the appropriate payment. After your payment is processed, preprinted vouchers for any remaining installment payments will be mailed to you.
  • Installment carryover – Overpayments (refunds) from the current-year tax return can be applied to the next year’s estimated tax by completing the back of the Form IT-40 or Form IT-40PNR. Once the carryover has been processed, you will be sent vouchers for the remaining installments.

IMPORTANT: Your estimated tax payment will be credited to the period in which it is paid. For instance, a payment made on May 1 will be considered a second-period installment payment as it was made between April 16 and June 15.

For more information about the penalty for underpayment of estimated tax, see Form IT-2210 (or Form IT-2210A if your income is received unevenly during the year).

Finally, when you make estimated tax payments throughout the year, you reduce (or eliminate) the balance due when you file your tax return.