Does Oklahoma require estimated tax payments on O&G income?
From the Oklahoma Tax Commission website… You are required to make quarterly estimated tax payments, if you can reasonably expect your tax liability to exceed the amount withheld by $500 or more and you expect your withholding to be less than the smaller of 70% of your current year’s liability or the tax liability shown on your return for the preceding taxable year of twelve months. Taxpayers who fail to pay estimated tax payments may be subject to interest on the amount underpaid.
If at least 66 2/3% of your gross income for this year or last year is from farming, estimated tax payments are not required.
Don - Thanks for your response.I was hoping that Oil and Gas income would be treated like farming since it’s so unpredictable. As an example, 80% of my income last year from oil and gas was received on December 27 and December 31. It just didn’t seem right that I had to pay a penalty. I don’t have withholding since I don’t live in Oklahoma. I’ll check and see if I can add a second state to my withholding but since income is likely to fall off a cliff, I don’t know if it’s worth it.
It will be interesting for this year because you have to pay withholding based upon last year’s income. And this year’s income is likely to be a good deal less to pay it with. Then next year, it will reverse (hopefully).
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