What are prepayment discounts?
Prepayments may be made by taxpayers who file monthly or quarterly returns. Prepayers are entitled to an additional 1.25% (one and one quarter percent) discount. The amount of the prepayment must be a reasonable estimate of the state and local tax liability for the entire reporting period. “Reasonable estimate” means at least 90% of the total amount due or an amount equal to the actual net tax liability due and paid for the same reporting period of the immediately preceding year. See Rule 3.286 “Seller’s and Purchaser’s Responsibilities” for additional information.
