What is additional tax for underpayment of estimated tax?
Additional tax for underpayment of estimated tax is owed when estimated tax payments are based on estimated tax that is less than 80% of the actual tax due for the taxable year, unless the estimated tax payments are made at the safe harbor rate or the underpayment is due to the capital addback for a resulting branch of an out-of-state bank. Additional tax is determined at the rate of 0.05 percent per day upon the amount of the underpayment for the period of the underpayment. The amount of the underpayment is the excess of the amount of the estimated tax or installment payment that would have been required if the estimated tax were equal to 80% of the actual tax owed for the current year, over the amount, if any, of the estimated tax or installment paid on or before the last date for payment. The period of the underpayment runs from the date the estimated tax or installment was required to be paid to the earlier of the dates when the estimated tax or installment was paid or the date of
