FILE PHOTO: A security camera hangs near a corner of the U.S. Internal Revenue Service (IRS) building in Washington May 27, 2015. REUTERS/Jonathan Ernst
January 16, 2019
WASHINGTON (Reuters) – Many taxpayers who had too little federal income tax withheld from their 2018 pay, or who underpaid estimated tax payments for the year, will not have to pay a penalty, the U.S. Internal Revenue Service said on Wednesday.
In a concession that had been widely awaited after sweeping tax law changes enacted in late 2017, the tax agency said:
“The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.”
It said, “The usual percentage threshold is 90 percent to avoid a penalty.”
(Reporting by Kevin Drawbaugh; Editing by Susan Thomas)