DOR released today the December revenue report and the story is all about income tax cash estimated payments, or the lack thereof.
December's collection of $1.969 billion was $87 million less than projected, due almost entirely to a $93 million shortfall in income tax cash estimated payments.
The December summary spreadsheet lays out the numbers. Whiles sales tax revenue was above benchmark and corporate/business tax below benchmark, they offset each other. But there was no offset for the shortfall in income tax cash estimated payments.
There is no certain explanation for the shortfall. These payments are frequently received in December so that taxpayers may use them as deductions on their federal 2011 tax returns. This year, there were two fewer December deposit days than a year ago, and the final deposit day fell on a holiday weekend, so some of these payments may be pushed into January.
Indeed, DOR has always cautioned that December and January need to be viewed as a whole when it comes to cash estimated payments.
Income tax cash estimated payments are made by taxpayers who have reason to believe they will owe tax on income earned from gains recorded on investments or dividends.
It is possible that some taxpayers who continued to make estimated payments in 2011 based on their gains in 2010 have now realized that they do not owe any additional tax, and thus they are not paying additional income tax cash estimated payments.
The Commonwealth received $192 million in such payments last month, which was $90 million less than December 2010 and $93 million less than forecast. On a year-to-date basis, however, income tax cash estimated payments of $686 million are just $33 million less than a year ago, down 4.6 percent, and $84 million less than forecast.
The flow has not stopped, but it has slowed down. "We should have a more complete picture on income tax cash estimated payments later this month," DOR Commissioner Amy Pitter said.
Overall, revenues of $9.847 billion for the first half of FY12 finished $252 million ahead of a year ago, an increase of 2.6 percent, and $49 million below the revised FY12 benchmark of $21.010 billion.
Prep Early for Next Tax Season posted on May 20
Filing season is finally over and we know the last thing on your mind is next tax season. But did you know that if given more prep time, you could be saving yourself lots of stress and time? Start planning for next tax season now …Continue Reading Prep Early for Next Tax Season
DOR’s Participation in the Family Court Workshops posted on Apr 22
Once a month, the Department of Revenue’s Child Support Enforcement (CSE) lawyers and staff volunteer to be a part of the Family Court Workshops for Mothers and Fathers at the Suffolk County Probate & Family Court in Boston. The workshops, a joint venture between community …Continue Reading DOR’s Participation in the Family Court Workshops
DOR Ruling Favorable in First Circuit Judgment posted on Mar 17
The United States Court of Appeals for the First Circuit issued judgments in the Department of Revenue’s (DOR) favor last month, finding that taxpayers in Bankruptcy proceedings cannot discharge late filed tax returns. The court consolidated two similar cases brought before them involving a total …Continue Reading DOR Ruling Favorable in First Circuit Judgment