Minnesota Additional Charge for Underpayment of Estimated Tax

Additional Charge for Underpayment of Estimated Tax
2023 EST, Additional Charge for Underpayment of Estimated Tax (for Trusts, Partnerships and S Corporations)
2023 Form EST, Additional Charge for Underpayment of Estimated Tax
For Trusts (Form M2), Partnerships (Form M3) and S Corporations (Form M8)
Name of Trust, Partnership or S corporation	

FEIN	

Minnesota Tax ID Number

Required Annual Payment

	1	 Minnesota tax for 2023 (from line​25 of Form M2; line 13 of Form M3; or line 14 of Form M8)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 1	
	2	 Minnesota withholding and credits for 2023 (see instructions)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2	
	3	 Subtract line 2 from line 1 (if result is less than $500, stop here; you do not owe an additional charge)  .  .  .  .  .  .  .  .  .  .  .  . 3	
	4	 Multiply line 1 by 90% (0.90)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4	
	5	 Minnesota income tax for 2022 (from line 22 of Form M2, line 10 of Form M3 or line 11 of Form M8).
	 	 If you did not file a 2022 return or filed a 2022 return for less than a full 12-month period, skip line 5
		 and enter the amount from line 4 on line 6 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5	
	6	 Required annual payment. Enter amount from line 4 or line 5, whichever is less  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6	
	 	 •	 If line 6 is less than or equal to line 2, stop here; you do not owe an additional charge.
	 	 •	 If line 6 is more than line 2, continue with line 7 or line 13, depending on which method you use.

Optional Short Method (see instructions to determine which method to use)

	7	 Estimated tax payments you made for 2023  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7	

	8	 Add line 2 and line 7  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8	
	9	 Total underpayment for the year. Subtract line 8 from line 6
		(if result is zero or less, stop here; you do not owe an additional charge)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9	
	10	 Multiply line 9 by 2% (0.02)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10	
	11	 •	 If the amount on line 9 will be paid on or after the regular due date for filing your return, enter 0.
	 	 •	 If the amount was paid before the regular due date, use the following computation and
			 enter the result on line 11: amount on line 9  X  number of days paid before the regular due date X	 .000137  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11	
	12	 Additional Charge. Subtract line 11 from line 10.
	 	 Enter result here and on line 35 of Form M2, line 20 of Form M3 or line 23 of Form M8  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12	
	
A	
B	
C	
Regular Method	
April 18, 2023	
June 15, 2023	
Sept. 15, 2023	
	13	 Enter 25% (0.25) of line 6 in each column  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13	
	14	 Credits. See instructions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	15	 Overpayment. If line 14 is more than line 13, subtract line 13
	 	 from line 14. Enter the result here and add it
		 to line 14 in the next column  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	16	 Underpayment. If line 14 is less than line 13,
	 	 subtract line 14 from line 13..  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	17	 Enter the date of payment or the regular due date for
		
filing your return, whichever is earlier (see instructions)  .  .  .  .  .  .  .  .  .
	18	 Number of days between the payment due date
	 	 and the date on line 17  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

D

Jan. 16, 2024

14	

15	
16	
17	
18	

	19	 Divide line 18 by 365. The result is a decimal  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19	

	 .	

.	

.	

.

	20	 Multiply line 19 by 5% (0.05). Enter as a decimal  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20	

	 .	

.	

.	

.

	21	 Multiply line 20 by line 16  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21	
	22	 Additional Charge. Add line 21, columns A-D.
	 	 Enter result here and on line 35 of Form M2, line 20 of Form M3 or line 23 of Form M8  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22	

You must include this schedule with your Form M2, M3 or M8.

9995

2023 Worksheet ESTa, Annualized Income Installment
For Trusts (Form M2), Partnerships (Form M3) and S Corporations (Form M8)
Name of Trust, Partnership or S corporation	

FEIN	

	
		
	
			

A	

Minnesota Tax ID Number

B	

1/1/2023 – 	
1/1/2023 –	
3/31/2023	 5/31/2023	

S	 tep 1	
		
	 	

Enter your adjusted gross income for each period.
(see instructions) (Trust, enter your taxable income
without your exemption for each period.) .  .  .  .  .  .  .  .  . 1	

S	 tep 2	
		

Annualization Amounts
(Trusts, see instructions) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2	

	Step 3	

Multiply step 1 by step 2  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3	

	Step 4	

Minnesota Additions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4	

	Step 5	

Add step 4 and step 3 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5	

	Step 6	

Minnesota Subtractions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6	

Step 7	

Subtract step 6 from step 5  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7	

S	 tep 8	
	 	

Figure tax for amount shown in step 7.  
Deduct appropriate nonrefundable credits .  .  .  .  .  .  .  . 8	

	Step 9	

Percentage for each period .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9	

	Step 10	

Multiply step 8 by step 9  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10	

	

4	

22.50%	

2.4	

45%	

C	

D

1/1/2023 –	
1/1/2023 –
8/31/2023	12/31/2023

1.5	

1

67.50%	

90%

Complete steps 11-17, one column at time before
moving to next column.
Step 11	
	 	
Step 12	
	 	
Step 13	
		

Add the amounts from step 17 from all
preceding payment periods .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11	
Subtract step 11 from step 10
(if result is zero or less, enter 0)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12	
Enter 25% (0.25) of line 6 of
Schedule EST in each column .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13	

Step 14	

Enter step 16 of the preceding column .  .  .  .  .  .  .  .  .  .  . 14	

Step 15	
Step 16	
	 	
Step 17	
	 	
	 	

Add step 13 and step 14 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15	
Subtract step 12 from step 15
(if result is zero or less, enter 0)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16	
Amount from step 12 or step 15,
whichever is less. Also enter this
amount on line 13 of Schedule EST .  .  .  .  .  .  .  .  .  .  .  .  .  . 17	

Worksheet Instructions
Step 1

Calculate your total income for each period
(column). Calculate your total income
minus your adjustments to income.

Step 2

Trusts do not use the amounts shown
in columns (a) – (d). Use the following
amounts instead: 6, 3, 1.71429, and
1.09091, respectively as the annualization
amounts.

Step 4

Determine your Minnesota Additions for
each quarter. Enter the amounts in step 4.

Step 6

Determine your Minnesota Subtractions for
each quarter. Enter the amounts in step 6.

9995

Step 8

Minnesota tax rate for composite tax and
nonresident withholding tax is 9.85%. Take
the amount from step 7 and multiply it by
9.85%. Add any minimum fee amount and/
or any other S corporation taxes and enter
the result in the line for step 8.

2023 Schedule EST Instructions
Additional Charge for Underpayment of Estimated Tax for Trusts (Form M2), Partnerships (Form M3) and S Corporations
(Form M8)

This schedule is not required if you are filing your first Minnesota tax return.
Who Must File

If you are a trust, partnership or S corporation, use this schedule to determine if you owe an additional charge for underpaying estimated tax.
(Decedent estates are not subject to the additional charge.)
You may owe an additional charge if one of the following is true:
•	 you did not pay the correct amount of estimated tax by the due dates, even if you expect to receive a refund
•	 your Minnesota tax liability for the current year, less any credits, is $500 or more
Exception. You are not subject to an additional charge for underpayment of estimated tax if this is the first year you are filing a Minnesota tax
return.

Avoiding the Additional Charge

To avoid an additional charge for underpayment of estimated tax, you must make the required estimated tax payments on time and pay the
lesser of:
•	 90% of your current year’s original tax liability, less any credits
•	 100% of your prior year’s total tax liability, less any credit. However, if your Minnesota assignable gross income on your 2022 Form M2 is
more than $150,000, you must use 110% of your previous year’s tax liability instead of 100%

Fiscal Year Taxpayers

If you file your Minnesota return on a fiscal year basis, change the payment due dates to the 15th day of the fourth, sixth and ninth months of
your fiscal year, and the first month of your next fiscal year.

Short Taxable Year

If you have a short taxable year, the installments are due on the 15th day of the third, sixth, ninth and final months. No installment is required
for a short taxable year of fewer than four months.

Line Instructions

These instructions refer to your original return. However, an amended return is considered the original return if it is filed by the regular due
date of the original return.

Line 2 — 2023 Withholding and Credits

Trusts: Add lines 26, 27, 29, and 30 of your 2023 Form M2.
Partnerships: Enter the amount from line 14 of your 2023 Form M3.
S corporations: Enter the amount from line 17 of your 2023 Form M8.

Optional Short Method or Regular Method

You may use the optional short method only if one of the following is true:
•	 you did not make any estimated tax payments
•	 you paid your 2023 estimated tax in four equal amounts on or before the due date of each installment
Note: If any payment was made before the installment due date, it is best to use the regular method. Using the short method will cause you to
pay a larger additional charge than the regular method. If the payment was only a few days early, the difference is likely to be small.
Continue with line 7 to use the optional short method, and skip lines 13-22.
If you are not eligible or you choose not to use the optional short method, use the regular method to determine your additional charge. Skip
lines 7–12 and continue with line 13.

Optional Short Method
Line 7

Enter the total amount of 2023 estimated tax payments you made in 2023 and 2024. Do not include any other amounts on line 7.

Regular Method

Complete column A, lines 13–16. Then, depending on whether you have an underpayment or an overpayment, either continue with line 17 of
column A (underpayment) or line 13 of column B (overpayment).

Line 13

Enter 25% (0.25) of line 6 in each of the four columns on line 13.
You may benefit from using the annualized income installment method if your income varied throughout the year or if you had a late capital
gain or higher 4th quarter income. If you use this method for one payment due date, you must use it for all. Complete the worksheet on
Form ESTa.
Continued
1

2023 Schedule EST Instructions (Continued)
Line 14

For each payment period, enter the total amount of:
•	 estimated payments you paid for each payment period
•	 Minnesota income tax withheld in 2023
•	 your 2022 income tax refund, if you elected on your 2022 Minnesota return to apply all or a portion of your refund to your 2023 estimated
tax
•	 any refundable credits you claim for 2023
You are considered to have received any refundable credits evenly during the year unless you show otherwise. Your 2022 refund, if any, is
considered a credit to your first payment period.

Lines 15 and 16

Compare line 13 of each column to line 14 of the same column.
If line 14 is more than line 13, you have an overpayment for the payment period. Subtract line 13 from line 14 and enter the result on line 15.
Add line 15 to the credit on line 14 of the next column. Overpayments in any quarter following an underpayment must first be applied to
making up previous underpayments.
If line 14 is less than line 13, you have an underpayment for that payment period. Subtract line 14 from line 13 and enter the result on line 16.
Continue with line 17.

Line 17

If you have an underpayment in all four quarters, in each column enter the date you filed your return or the regular due date for filing your
return, whichever is earlier.
Otherwise, enter the date when the underpayment on line 16 was paid in full.
Example: You made your first quarter estimated tax payment on April 20, but you show an underpayment on line 16. On June 14, you paid
your second quarter payment in full and included the underpayment from the first quarter. On line 17, you would enter June 14 in the first and
second quarter columns.

2