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What's the difference between federal and state estimated taxes?

Explains the difference between federal and state estimated taxes, including who they’re paid to, why they’re required, and how separate rules and penalties may apply.

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Federal and state estimated taxes serve a similar purpose, but they’re paid to different tax agencies and follow separate rules.


Federal estimated taxes

Federal estimated taxes are payments you send to the IRS to cover income that isn’t subject to withholding.

The IRS generally requires you to pay at least 90% of your total tax for the year through:

  • Withholding from your paycheck

  • Estimated tax payments

  • Or a combination of both

If you don’t pay enough throughout the year, you may owe an estimated tax penalty when you file.


State estimated taxes

State estimated taxes are payments you send to your state tax agency to cover your state income tax.

Paying federal estimated taxes does not cover your state tax obligation. Each state has its own rules for:

  • Who must pay estimated taxes

  • How much to pay

  • When payments are due

Because requirements vary by state, you’ll need to check with your state tax agency to confirm whether estimated payments are required.


Key takeaway

Federal and state estimated taxes are separate. Paying the IRS doesn’t satisfy state requirements, so you may need to make estimated payments to both to avoid penalties.

This content is provided for informational purposes only and should not be construed as tax, legal, financial, accounting, or other advice. Rules and regulations vary by location and are subject to change, so please consult with an expert if you need advice specific to you.

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