Underpayment Penalty

Addition for Underpayment of Estimated Tax
You will generally be subject to this addition to tax if you did not have withholding and/or estimated payments equal to 80% of the total tax liability required to be paid and your 2005 tax due after credits and withholding is greater than $400. The 80% requirement is reduced to 66 2⁄3% for individuals who receive two-thirds of their income from fishing or farming.

You may not be subject to an underpayment penalty if you qualify for one of the following exceptions:

You are a qualified farmer or fisherman and are paying the full amount of the tax due on or before March 1, 2006;
You were a Massachusetts resident and werenot liable for 2004 taxes (where the taxable year was 12 months); or
The sum of your estimated payments and withholding equals or exceeds your 2004 total tax due (where the taxable year was 12 months and a return was filed).

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