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Filing Requirements 15. How must a fiscal year taxpayer calculate quarterly estimated payments if one quarter straddles the period in which the MBT ends and the CIT begins? Must a fiscal year taxpayer pay its final MBT quarterly estimated
The first CIT estimate is based on the business activity that occurred during the months in the fiscal year quarter that fall within 2012. The quarterly estimate should be based on the actual Corporate Income Tax base of those months that are within 2012 and should not be computed using any period from the last MBT tax year. Estimates cannot be based on the prior year's MBT tax liability.
If the quarter includes months that occurred in both 2011 and 2012, that taxpayer will have 2 “quarters” for which estimated returns and estimated payments will be due. In this case, a taxpayer’s final MBT quarter will end on December 31, 2011. This taxpayer’s final MBT quarterly estimate will include all business activity that occurred in 2011. The final MBT quarterly return and payment will be due on January 15, 2012.
The remaining portion of this taxpayer’s quarter will fall within 2012. The activity that occurred in 2012 will be subject to the CIT. The taxpayer is also required to submit a quarterly estimated return and estimated payment for this period. The due date for this estimated return and estimated payment will be the 15th day of the month following the end of the taxpayer’s quarter.
If a taxpayer has an MBT or a CIT tax year of less than 4 months, the taxpayer is not required to file an estimated return or make an estimated payment for that short tax year. Payment of tax liability for that short tax year is due on the last day of the fourth month following the end of that short tax year.
Example: Taxpayer A has a taxable year end of October 31. Its first quarter includes November, December, and January. For the MBT/CIT transition, November and December create their own short “quarter” (and tax year) under the MBT, and January is another short “quarter” under the CIT. In this example, the MBT period will not have an estimate due because it is a tax year of less than 4 months. The CIT quarter’s estimated return and estimated payment will be due February 15, 2012.
If the taxpayer fails to make the estimated payment to cover the estimated MBT or CIT tax liability, the taxpayer is subject to penalty. The fact that the taxpayer's payment on the final MBT return covers the taxpayer's liability does not negate a penalty liability for failure to make the estimated MBT quarterly payment required. The existing requirements governing payment of MBT liability continue to apply and will be enforced.