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Estimated Tax Penalty - Individuals

In 2005 the Office of Tax and Revenue (OTR) began to automatically charge a penalty for underpayment of estimated tax by any person, financial institution or business. This change took effect January 1, 2005, for tax year 2004 returns.

OTR will charge 10 percent interest, compounded daily, on any underpayment of estimated taxes. In the past, auditors manually added this charge. OTR’s Integrated Tax System (ITS) is now able to find all underpayments of estimated taxes and automatically charge penalties.

To avoid such charges, taxpayers should remember the following instructions when filing District returns and when planning for the coming tax year:

Instructions for Individuals

  • You must pay estimated taxes if your residence is in the District, your gross income is not fully subject to withholding tax, and you have a remaining tax liability of more than $100 for the tax year.
  • DC residents must pay estimated taxes on any wages they earn outside the District, unless their employer pays DC withholding taxes.
  • Make your four (4) quarterly estimated payments with vouchers from the Form D-40ES booklet. This booklet and other DC tax forms may be obtained from the Tax Forms and Publications page or by calling OTR Customer Service at (202) 727-4829.

Instructions for Corporations, Financial Institutions, and Unincorporated Businesses

  • Each corporation, financial institution, and unincorporated business required to file a DC return must pay estimated taxes, if its tax for the year is more than $1,000.
  • Pay your estimated tax payments online with the eTaxpayer Service Center or you can use vouchers from the D-20ES or D-30ES booklet, which can be found on the Tax Forms and Publications page under “Business Tax Forms and Publications (2012)”.

Persons with questions about estimated tax requirements may call OTR Customer Service at (202) 727-4829.