Extensions are conditioned on a “properly estimated” amount of tax being paid by the unextended due date. As explained in Department of Taxation Announcement 2007-20, the Department will typically invalidate any extensions where the amount of tax paid prior to the unextended due date is less than 90% of the tax as shown on the return. If the extension is invalidated, penalties (typically, a 25% failure to file penalty) and interest will be charged from the unextended due date. If the taxpayer then demonstrates that the amount paid by the original due date was 100% of the properly estimated tax liability, the penalties and interest will be reversed.
The new rules make it unnecessary to file Form N-100 or N-301 unless an extension payment is being made.
The full text of the new rules (with changes from the old rules indicated) is below.