Who Must Pay Estimated Tax

Generally a taxpayer must make payments of estimated tax if the following conditions are met:

• The taxpayer owes $1,000 or more for the tax year after subtracting federal income tax withheld and credits from taxable income, and
  
  
• The taxpayer expects the tax withheld and credits on this year's tax return to be less than the smaller of:
  
  
  • 90% of the tax liability to be shown on this year's tax return, or
    
    
  • 100% of the tax liability shown on last year's tax return (which must cover all 12 months)