Post Content

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. 

Written By:

Recent Posts

Top priority: protecting the taxpayer and the Commonwealth’s revenue posted on Oct 8

With identity theft on the rise, the Massachusetts Department of Revenue is taking new steps to combat the problem and protect taxpayers. In some cases, this means asking taxpayers to take a quiz before getting their state refund check. DOR is teaming up with LexisNexis   …Continue Reading Top priority: protecting the taxpayer and the Commonwealth’s revenue

Thinking about the next step in your career? posted on Oct 3

Thinking about the next step in your career?

Dust off that resume! The Department of Revenue is holding a Diversity Career Fair and your next job could be right around the corner. DOR has a number of exciting employment opportunities now available and will have more openings throughout the year.  Whether you’re looking   …Continue Reading Thinking about the next step in your career?

Mission Accomplished posted on Sep 15

Mission Accomplished

They are two dogs with a very unique trick. Meet Fillmore and Max, a canine pair trained specifically to sniff out tobacco. The Massachusetts Department of Revenue recently teamed up with Altria representatives and their tobacco sniffing dogs for a two-day tobacco drive in an   …Continue Reading Mission Accomplished