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How are estimated payments affected by income shown on Schedule K-1-P?

Answer #516 -- ( Published 03/17/2006 02:44 PM | Updated 07/12/2017 11:45 AM )

How are estimated payments affected by income shown on Schedule K-1-P?

For individuals, if your tax liability is $500 or greater after applying any withholding and credits, you are responsible for making estimated payments. The same is true for corporations that have a tax liability of $400 or greater. Partnerships and S corporations are not required to make estimated payments.

In some instances, distributions from partnerships and S corporations can increase your tax liability significantly, and you may not have enough withholding to cover your tax liability. In these instances, you are responsible for making estimated payments. You need to review your quarterly reports from the issuer and monitor the amount of income you are receiving from partnerships and S corporations. If your tax liability owed to the department is greater than the allowable amount indicated above because of income you received from a partnership or S corporation, you may be able to reduce or eliminate the penalty by annualizing your income. Income from partnerships and S corporations is treated as being received by you on the last day of the partnership's or S corporation's tax year. See Form IL-2210, Computation of Penalties for Individuals, and the Form IL-2210 Instructions, or Form IL-2220, Computation of Penalties for Businesses, and the Form IL-2220 Instructions, for more information. 

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