News Release: Maryland Farmers and Fishermen Receive Penalty Relief on Taxes
Maryland Farmers and Fishermen
Receive Penalty Relief on Taxes
- Late IRS Start up May Cause Delay for Farmers and
Fishermen Filing Taxes -
Annapolis, Md. (January 24, 2013) – Comptroller Franchot announced penalty relief today for Maryland farmers and fishermen who may be forced to file estimated payments late because of this year’s delayed start to the tax season. Following the Internal Revenue Service (IRS), current-year personal income tax returns are not being accepted or processed until January 30.
Farmers and fishermen are expected to pay their 2012 taxes by March 1, and missing the deadline typically results in interest penalties due for an underpayment of estimated taxes. Maryland and the IRS are providing relief from the interest penalties and pushing back the deadline to April 15.
The recent enactment of the American Taxpayer Relief Act (ATRA) by the federal government caused the delay in filing returns and several federal tax forms often filed by farmers and fishermen were also impacted. According to the IRS, the extensive programming and required testing of IRS systems will delay their ability to accept and process these forms.
“My office is committed to working with both farmers and fishermen impacted by this change, as well as the IRS, to ensure that taxes are filed properly and that no one is adversely affected by the changes,” said Comptroller Franchot.
Since Maryland generally follows IRS regulations, the federal changes necessitate the Comptroller’s Office take similar action, so as not to cause unnecessary hardship for impacted taxpayers.
Normally, if the gross income of farmers or fishermen is at least two-thirds of their total estimated gross estimated income for the year, the 2012 declaration and full payment of the estimated tax is due on or before January 15, 2013. In light of the delayed start to the tax season, a farmer or fisherman may elect to file a complete annual return on or before April 15, 2013 and make full payment of the tax at that time.
If a farmer or fisherman fails to file and pay the tax due with the final return by April 15, and the income is not subject to withholding or not enough Maryland tax is withheld, the taxpayer would be subject to interest charges. To compute the applicable interest charge, complete lines 1 through 10 of Form 502UP. Enter the amount from line 10 on line 13, column 4 and complete the rest of Form 502UP. Only column 4 will have entries.
To claim exemption from the interest charge for underpayment of estimated tax or to use the special calculation, enter code number 300 in one of the boxes marked “code numbers” to the right of the telephone number area on Form 502 or 505. Attach Form 502UP to the Maryland tax return if the special calculation is used.
For more information on the IRS pushing back the filing start date, please visit http://www.irs.gov/uac/