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Blank D 422 North Carolina PDF Form

The D 422 North Carolina form is designed to help individuals assess whether they owe a penalty for underpaying their estimated tax. By completing this form, taxpayers can determine their required annual payment and calculate any penalties that may apply. If you believe you need to fill out this form, click the button below to get started.

Article Guide

The D 422 North Carolina form is an essential tool for individuals who need to assess whether they owe a penalty for underpaying their estimated tax. This form guides users through a series of steps to determine their required annual payment and any penalties that may apply. It consists of multiple parts, including a short method for those who meet specific criteria, and a regular method for others. Farmers and fishermen have unique considerations, as they may not need to file if they pay their taxes by a certain date. The form requires detailed calculations, including tax credits, withholding amounts, and payment deadlines. It's crucial to follow the instructions carefully, as the consequences of underpayment can lead to penalties that vary based on the timing of payments. Overall, understanding and correctly completing the D 422 form can help individuals avoid unnecessary financial burdens while ensuring compliance with North Carolina tax regulations.

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(Rev. 12--98)		1998
Form D--422	NORTH CAROLINA DEPARTMENT OF REVENUE

UNDERPAYMENT OF ESTIMATED TAX BY INDIVIDUALS

Name(s) shown on tax return

Social Security Number

Instructions

Who Should Use This Form.--Use this form to see if you must pay a penalty for underpaying your estimated tax. Complete Part I to determine the required annual payment. Complete either Part II or Part III to determine the penalty that you owe. If you are a farmer or a fisherman and pay the tax due by March 1, 1999, do not file this form since you do not have to pay a penalty.

NOTE: If you were not required to file a 1997 North Carolina income tax return, STOP HERE. You do not owe the penalty and you do not have to complete this form.

Short Method

You may use the short method only if:

. You made no estimated tax payments (or your only payments were withheld North Carolina income tax); OR

. You paid estimated tax in four equal amounts on the due dates.

NOTE: If you made estimated tax payments, the short method will give the precise penalty amount only if your payments were made exactly on the due dates. If any payment was made earlier than the due date, you may use the short method, but using it may cause you to pay a larger penalty than the regular method. If the payment is only a few days early, the difference will generally be small. Do Not use the short method if you made any of your payments late. Important: A farmer or fisherman cannot use the short method to

determine the penalty since the penalty for a farmer or fisherman is determined in the last quarter only.

Regular Method

Use the regular method to figure the penalty if you are not eligible to use the short method. To use the regular method, complete Part I below and Part III on the back.

Line--By--Line Instructions

Line 6 -- If this line is less than $1,000, you do not owe a penalty and need not attach this form to your tax return.

Line 7 -- Figure your l997 tax by subtracting the tax credits on line 15 from the tax on line 12 of your 1997 return.

If you were required to file a return for 1997 but have not filed, do not complete this line. Instead, enter the amount from line 4 on line 8.

Line 16 -- If your income varies during the year, for example you receive unexpected or seasonal income not subject to withholding in April or later, you may be able to lower the amount of your penalty by completing Form D--422A, Annualized Income Installment Worksheet. If you annualized your income for any payment period, you must annualize it for all payment periods.

Line 17 -- Complete line 17 as follows:

. You are considered to have paid any

withheld State income tax evenly over the period you worked during the year unless you can show otherwise. If you worked all year, divide the total amount withheld by 4, and enter the result in each column.

. Include your estimated tax paid for each

payment period. Also include any 1997 overpayment of tax which you elected to apply to your 1998 estimated tax. If you file your return and pay the tax due by January 31, 1999, include on line 17, column (d), the amount of tax you pay with your return.

Line 23 -- If you do not show an underpayment on line 23 for columns (a), (b), (c), or (d), you need not attach this form to your tax return unless you annualized your income.

Line 25 -- Figure the number of days after the due date of an installment through December 31, 1998, or through the date the estimated tax was paid regardless of which installment the payment was for. For example, if line 23, column (a) shows an underpayment, any later payment of estimated tax is considered the date line 23, column (a) was paid to the extent of the underpayment. If December 31, 1998 is earlier, enter 260, 199, and 107 respectively in columns (a), (b), and (c).

Line 27 -- Enter the number of days after December 31, 1998, through the date the estimated tax payment was made, or through April 15, 1999, whichever is earlier. If April 15, 1999, is earlier, enter 105 in columns (a), (b), and

Part I

Required Annual Payment -- All filers must complete this part.

1.	1998 tax from Form D--400, line 12	. . . .	. . . . . . . . . . . . . . . . . . . . .
2.	Tax credits from 1998 Form D--400, line 15	. . . .	. . . . . . . . . . . . . . . . . . . . .
3.	Subtract line 2 from line 1	. . . .	. . . . . . . . . . . . . . . . . . . . .
4.	Multiply line 3 by 90% (.90) or 66 2/3% (.6667) for farmers and commercial fishermen	4.
4.		4.
5.	Withholding taxes from 1998, Form D--400, line 13a plus line 13b	. . . .	. . . . . . . . . . . . . . . . . . . . .
6.	Subtract line 5 from line 3. If less than $1,000, stop here; do not complete or file this form. You do not owe the penalty . . . .
7.	Enter your 1997 tax (amount from line 12 less tax credit(s) claimed on line 15)	. . . .	. . . . . . . . . . . . . . . . . . . . .
8.	Required annual payment. Enter the smaller of line 4 or line 7	. . . .	. . . . . . . . . . . . . . . . . . . . .
	Note: If line 5 is equal to or more than line 8, stop here. You do not owe the penalty.

Part II

Short Method -- Read the instructions for the Short Method before you complete this part. It cannot be used in all circumstances.

9.	Enter the amount, if any, from line 5 above				9.
10.	Enter the total amount, if any, of estimated tax payments you made				10.
11.	Add lines 9 and 10						11.
12.	Total underpayment for year. Subtract line 11 from line 8. (If zero or less, stop here; you do not owe						12.
	the penalty)

13.	Multiply line 12 by .0575 and enter the result						13.
14.	.	If the amount on line 12 was paid on or after 4/15/99, enter --0--.
	.	If paid before 4/15/99, make the following computation to find the amount to enter on line 14.
		Amount on		Number of days paid before
			X		X	.00022	14.
		line 12		4/15/99

15.	PENALTY. Subtract line 14 from line 13.		Enter the result here and on line 17b of your income tax return,
	Form D--400						15.

Form D--422 (1998)

Page 2

Part III	Regular Method


Section A -- Figure Your Underpayment			Payment Due Dates
Section A -- Figure Your Underpayment		(a)	(b)	(c)	(d)
		4/15/98	6/15/98	9/15/98	1/15/99

16.Divide line 8 by 4 and enter the result in each column. Exception: If you use the annualized income install--

	ment method, complete Form D--422A (Annualized	16.
17.	Income Installment Worksheet) and check this box.
	Income Installment Worksheet) and check this box.

	Estimated tax paid and tax withheld. For column (a) only,
	Estimated tax paid and tax withheld. For column (a) only,
	enter the amount from line 17 on line 21. (If line 17 is
	equal to or more than line 16 for each payment period,	17.
	. . . .stop here; you do not owe the penalty.)
	. . . .stop here; you do not owe the penalty.)
	Complete lines 18 through 24 of one column before
	going to the next column.
18.	Enter amount, if any, from line 24 of previous colum . . . .	18.
18.			19.
19.	Add lines 17 and 18		19.

20.	Add amounts on lines 22 and 23 of the previous column
	and enter the result	20.

21.Subtract line 20 from line 19 and enter the result. If zero

or less, enter zero. (For column (a) only, enter the
amount from line 17)	21.

22.Remaining underpayment from previous period. If the

amount on line 21 is --0--, subtract line 19 from line 20
and enter the result. Otherwise, enter --0--	. . . . 22.
23. Underpayment. If line 16 is larger than or equal	to
line 21, subtract line 21 from line 16 and enter the
result. Enter 0 on line 18 of the next column and go to
line 19. Otherwise, go to line 24	. . . . 23.

24.Overpayment. If line 21 is larger than line 16, subtract

line 16 from line 21 and enter the result. Then go to

line 18 of next column. .

. . . . . . . . . . . . . . . . . . . .

. . . .

. . . . 24.

Section B Figure the Penalty (Complete lines 25 through 28 of one column before going to the next column)--

April 15, 1998 December 31, 1998

4/15/98

6/15/98

9/15/98

25. Number of days after the date shown above line 25 through

Days:

the date the amount on line 23 was paid or

12/31/98,

whichever is earlier.

. . . .

. . . . . . . . . . . . . . . .

. . . . . . . . . .

25.

26.

Underpayment

Number of days

.09

on line 23

on line 25

(see instructions)

365

26.

January 1, 1999

April 15, 1999

12/31/98

1/15/99

27. Number of days after the date shown above line 27 through

Days:

the date the amount on line 23 was paid or

4/15/99,

whichever is earlier.

. . . .

. . . . . . . . . . . . . . . .

. . . . . . . . . .

27.

28.

Underpayment

Number of days

.08

on line 23

on line 27

(see instructions)

365

28.

29.Penalty (add amounts on line 26 and 28). Enter here and on line 17b of your individual income tax return,

Form D--400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.

➤ PDF File

Form Specifications

Fact Name	Details
Purpose	The D-422 form is used to determine if individuals owe a penalty for underpaying estimated taxes.
Eligibility	This form is for individuals who may have underpaid their estimated tax, excluding farmers and fishermen who meet certain criteria.
Governing Law	North Carolina General Statutes, specifically N.C. Gen. Stat. § 105-163.2.
Short Method	The short method can only be used if no estimated tax payments were made or if they were made in four equal installments.
Regular Method	Individuals not eligible for the short method must use the regular method to calculate their penalty.
Penalty Calculation	The penalty is calculated based on the amount of underpayment and the number of days the payment was late.
Annualized Income	Taxpayers with varying income may use Form D-422A to annualize their income, potentially lowering their penalty.
Filing Deadline	Taxpayers must file and pay any owed taxes by January 31, 1999, to avoid penalties.
Exemption from Filing	If the required annual payment is less than $1,000, the taxpayer does not owe a penalty and does not need to file the form.

D 422 North Carolina: Usage Guidelines

Filling out the D 422 North Carolina form requires careful attention to detail. After completing the form, you will have a clearer understanding of whether you owe a penalty for underpaying your estimated tax. Follow these steps to ensure accurate completion.

Gather your tax documents, including your 1997 and 1998 tax returns.
Write your name(s) and Social Security Number at the top of the form.
Complete Part I to determine your required annual payment:

Line 1: Enter your 1998 tax from Form D-400, line 12.
Line 2: Enter your tax credits from 1998 Form D-400, line 15.
Line 3: Subtract line 2 from line 1.
Line 4: Multiply line 3 by 90% or 66 2/3% if you are a farmer or fisherman.
Line 5: Enter withholding taxes from 1998, Form D-400, lines 13a and 13b combined.
Line 6: Subtract line 5 from line 3. If the result is less than $1,000, stop here; you do not owe a penalty.
Line 7: Enter your 1997 tax (line 12 minus line 15 from your 1997 return).
Line 8: Enter the smaller amount between line 4 and line 7.

Proceed to either Part II (Short Method) or Part III (Regular Method) based on your eligibility.
If using the Short Method, complete lines 9 to 15:

Line 9: Enter the amount from line 5.
Line 10: Enter total estimated tax payments made.
Line 11: Add lines 9 and 10.
Line 12: Subtract line 11 from line 8. If zero or less, stop here.
Line 13: Multiply line 12 by .0575.
Line 14: If applicable, compute the amount to enter.
Line 15: Subtract line 14 from line 13. This is your penalty.

If using the Regular Method, complete lines 16 to 29:

Line 16: Divide line 8 by 4 and enter the result in each column.
Complete lines 17 to 24 for each payment period.
For Section B, complete lines 25 to 28 for penalty calculation.
Line 29: Add amounts from lines 26 and 28. This is your total penalty.

Review your entries for accuracy before submitting the form.
Attach the completed form to your income tax return if required.

Your Questions, Answered

What is the purpose of the D 422 North Carolina form?

The D 422 form is used by individuals in North Carolina to determine if they owe a penalty for underpaying their estimated tax. By completing this form, taxpayers can assess their required annual payment and calculate any penalties that may apply. It helps ensure compliance with state tax regulations and allows individuals to understand their tax obligations better.

Who needs to use this form?

This form should be used by individuals who are required to pay estimated taxes and want to check if they underpaid. If you did not need to file a North Carolina income tax return for the previous year, you do not need to fill out this form. Additionally, farmers and fishermen who pay their taxes by March 1, 1999, are exempt from filing this form as they do not incur a penalty.

What are the short and regular methods for calculating penalties?

The short method can be used if you made no estimated tax payments or if you paid estimated tax in four equal amounts on the due dates. However, if any payments were made late or if you made payments early, using the short method may not provide an accurate penalty amount. The regular method is used when the short method is not applicable. It requires filling out additional sections of the form to calculate the penalty based on your specific tax situation.

What should I do if my income varies throughout the year?

If your income fluctuates, such as receiving seasonal income not subject to withholding, you may be able to reduce your penalty. In this case, you can complete Form D-422A, the Annualized Income Installment Worksheet, to adjust your calculations. It’s important to annualize your income for all payment periods if you choose this method.

What happens if my calculated underpayment is less than $1,000?

If your calculated underpayment is less than $1,000, you do not owe a penalty and do not need to attach the D 422 form to your tax return. This threshold is significant because it indicates that your estimated tax payments were sufficient to avoid penalties. Always ensure to check this line carefully to avoid unnecessary filings.

Common mistakes

Incorrect Personal Information: Failing to accurately fill in the name(s) and Social Security Number can lead to processing delays or issues with your tax return.
Not Understanding Eligibility: Some individuals mistakenly complete the form even when they are not required to file it. If you weren’t required to file a 1997 North Carolina income tax return, you should stop here.
Using the Wrong Method: People often select the short method when they are not eligible. This method is only appropriate if you made no estimated tax payments or paid them on time in four equal amounts.
Late Payments: If any estimated tax payments were made late, individuals should not use the short method. This mistake can result in a larger penalty than necessary.
Incorrect Line Calculations: Miscalculating the amounts on key lines, such as line 7 (1997 tax) or line 8 (required annual payment), can lead to incorrect penalty assessments.
Ignoring Annualized Income: If your income varies throughout the year, failing to complete Form D-422A can lead to a higher penalty than necessary.
Overlooking Underpayment Lines: Individuals sometimes forget to check line 23 for underpayment. If there is no underpayment, you do not need to attach this form to your tax return.
Misunderstanding Payment Dates: Confusion about the due dates for estimated tax payments can lead to incorrect calculations on lines 25 and 27, affecting the penalty amount.
Failing to Attach Required Documentation: Not including the D-422 form when it is required can result in penalties being assessed incorrectly.
Not Reviewing Instructions: Skipping the detailed instructions can lead to errors in the form completion. Each line has specific requirements that must be followed closely.

Documents used along the form

The D-422 form is a crucial document for individuals in North Carolina who may face penalties for underpaying estimated taxes. Several other forms and documents are commonly used alongside the D-422 to ensure compliance with tax obligations. Below is a list of these related documents, each described briefly for clarity.

Form D-400: This is the North Carolina Individual Income Tax Return form. Taxpayers use it to report their income, calculate their tax liability, and claim any applicable credits and deductions.
Form D-422A: The Annualized Income Installment Worksheet helps taxpayers who experience fluctuating income. It allows them to calculate estimated tax payments based on actual income received during specific periods.
Form D-400TC: This form is used to claim tax credits in North Carolina. Taxpayers can apply various credits to reduce their overall tax liability when filing their income tax return.
Form NC-40: The Estimated Income Tax Payment form is for individuals making estimated tax payments. It allows taxpayers to report and pay their estimated tax liabilities for the year.
Form NC-1099: This form is used to report various types of income other than wages, such as interest and dividends. It is essential for taxpayers to accurately report all income sources on their tax returns.
Form D-400-ES: This is the Estimated Tax for Individuals form. Taxpayers use it to calculate and pay their estimated tax liabilities quarterly throughout the year.
Form D-400-CP: The Individual Income Tax Payment Coupon is used for making tax payments. Taxpayers can submit this coupon along with their payment to ensure proper credit to their tax account.
Form D-400-AP: This is the Application for Automatic Extension of Time to File. Taxpayers can use it to request an extension for filing their income tax return without incurring penalties.
Form NC-5: This is the North Carolina Employee’s Withholding Allowance Certificate. Employees complete this form to inform their employers of the number of allowances they are claiming for withholding tax purposes.
Form NC-3: This is the Annual Withholding Reconciliation form. Employers use it to report the total income tax withheld from employees throughout the year and reconcile their withholding accounts.

Understanding these forms and their purposes can help individuals navigate their tax responsibilities more effectively. Each document plays a vital role in ensuring compliance with North Carolina tax laws and minimizing potential penalties.

Similar forms

The D 422 North Carolina form, which addresses underpayment of estimated tax by individuals, shares similarities with several other tax-related documents. Below is a list of four forms that are comparable, along with a brief explanation of how they are alike:

Form 1040-ES: This form is used by individuals to calculate and pay estimated taxes. Like the D 422, it helps taxpayers determine if they owe a penalty for underpayment of estimated taxes and outlines payment schedules.
Form 2210: This document is utilized to determine whether a taxpayer owes a penalty for underpayment of estimated tax. Similar to the D 422, it provides a method for calculating the penalty based on the taxpayer's specific situation and payment history.
Form D-422A: The Annualized Income Installment Worksheet, like the D 422, is used to calculate estimated tax payments. It allows taxpayers with fluctuating incomes to adjust their payment amounts, ensuring they are not penalized for income variations throughout the year.
Form 4868: This form is for requesting an extension of time to file a U.S. individual income tax return. While it primarily focuses on filing extensions, it also addresses the need for estimated tax payments, similar to the D 422, to avoid penalties for underpayment.

Dos and Don'ts

When filling out the D-422 North Carolina form, it's essential to be careful and thorough. Here’s a handy list of things to do and avoid, ensuring you complete the form correctly and efficiently.

Do read the instructions carefully before starting. Understanding the requirements will save you time and reduce errors.
Do double-check your calculations. Mistakes in math can lead to penalties or delays in processing.
Do use the correct method for your situation. If you qualify for the short method, ensure you meet all the criteria before proceeding.
Do keep records of any payments made and withholdings throughout the year. Accurate documentation can help clarify any discrepancies.
Do file the form on time to avoid additional penalties. Timeliness is crucial in tax matters.

Don't rush through the form. Take your time to ensure all sections are filled out accurately.
Don't use the short method if you made any late payments. This could lead to incorrect penalty calculations.
Don't ignore the income variance. If your income fluctuated, consider completing the Annualized Income Installment Worksheet.
Don't forget to include all necessary information, such as your Social Security Number and tax credits from previous returns.
Don't hesitate to seek help if you’re unsure about any part of the form. Consulting a tax professional can provide clarity.

Misconceptions

Understanding the D 422 North Carolina form can be challenging, especially with the various misconceptions surrounding it. Here are seven common misunderstandings about this form:

Misconception 1: Only those who owe taxes need to file the D 422 form.

This is not true. If your required annual payment is less than $1,000, you do not owe a penalty and do not need to file this form.

Misconception 2: Farmers and fishermen do not need to worry about penalties.

While it is true that farmers and fishermen have different rules, they must still file the form if they do not pay their tax by the specified deadline, even if they are exempt from penalties if paid on time.

Misconception 3: The short method is always the best option for calculating penalties.

This is misleading. The short method can only be used under specific circumstances. If any payment was made late or early, it might result in a larger penalty than using the regular method.

Misconception 4: You can ignore the D 422 form if you did not file a tax return the previous year.

If you were not required to file a tax return for the previous year, you do not owe a penalty and do not need to complete the D 422 form.

Misconception 5: You can use the short method if you made any estimated tax payments.

This is incorrect. The short method can only be used if you made no estimated tax payments or if you made equal payments on time. Late payments disqualify you from using this method.

Misconception 6: Completing the D 422 form is optional for all taxpayers.

For those who owe a penalty for underpayment, completing this form is mandatory. It helps determine the exact penalty amount owed.

Misconception 7: The D 422 form is only relevant for individuals with high incomes.

This is not the case. Any individual who underpays their estimated tax, regardless of income level, may need to file this form to assess potential penalties.

Being informed about these misconceptions can help ensure compliance with tax regulations and avoid unnecessary penalties. If there are any uncertainties, seeking guidance from a tax professional can provide clarity and peace of mind.

Key takeaways

Understanding the D-422 North Carolina Form is essential for individuals who may face penalties for underpaying their estimated tax. Here are key takeaways to help navigate this process:

Identify if you need to use this form. If you were not required to file a 1997 North Carolina income tax return, you can stop here—you do not owe any penalty.
Complete Part I to determine your required annual payment. This is a crucial first step before calculating any penalties.
Farmers and fishermen have specific rules. If you pay your tax by March 1, 1999, you do not need to file this form, as you are exempt from penalties.
Use the Short Method only if you made no estimated tax payments or if your payments were made in four equal installments on time. Late payments disqualify you from this method.
If you are not eligible for the Short Method, use the Regular Method. This involves completing additional parts of the form to accurately calculate any penalties owed.
Pay attention to line instructions. For instance, if your required annual payment is less than $1,000, you do not owe a penalty and do not need to submit the form.
Consider annualizing your income. If your income fluctuates, using Form D-422A can help reduce your penalty by allowing you to adjust your payments based on actual income received.
Keep track of the number of days for each payment period. This information is vital for calculating any penalties accurately, especially if payments were made late.