Yes, there are special provisions related to estimated tax payments for farmers and fishermen.
- Single Installment Requirement: Farmers and fishermen are required to make only one estimated tax installment payment for the taxable year, rather than the four quarterly payments required of other taxpayers. This single installment is due on January 15 of the following taxable year.
- Reduced Payment Percentage: The amount of the required installment for farmers and fishermen is calculated as 66⅔ percent of the required annual payment, instead of the usual 90 percent.
- Alternative Filing and Payment Deadline: If a farmer or fisherman does not make the required estimated tax installment payment by January 15, they can avoid the addition to tax for failing to pay estimated income tax by filing their return and paying the full amount of tax reported on the return by March 1 of the following taxable year.
- Definition of Farmer or Fisherman: An individual qualifies as a farmer or fisherman if at least two-thirds of their gross income for the taxable year or the preceding taxable year is from farming or fishing.
- Penalty Relief: The IRS has provided penalty relief in certain circumstances for farmers and fishermen who are unable to meet the estimated tax payment deadlines due to unusual circumstances, such as electronic filing issues. This relief can include waivers of the addition to tax for underpayment of estimated taxes if specific conditions are met.
These provisions are designed to accommodate the unique income patterns of farmers and fishermen, who may not have regular income throughout the year, making it difficult to adhere to the standard estimated tax payment schedule.
Sources:
Notice 2013-5
Penalty Relief Provided for Farmers and Fishermen
§ 1.6153-1. Payment of estimated tax by individuals.
§ 6654. Failure by individual to pay estimated income tax
Publication 225 (2023)
Notice 2022-13
