How are quarterly prepayments calculated?
The prepayment calculation uses the tax due (not taxes and fees) on your tax form. For foreign companies, the greater of the state of domicile or the state of Washington tax due is used for the calculation. When tax liability is $400 or greater, there are prepayments due. Prepayments are calculated as follows:
- Quarter 1 - 45 percent of the tax due
- Quarter 2 - 25 percent of the tax due
- Quarter 3 - 25 percent of the tax due
If the tax due is less than $400, prepayments are not required.
When are premium tax prepayments due?
Prepayments are due three times yearly:
- Quarter 1 - June 15
- Quarter 2 - September 15
- Quarter 3 - December 15
Can I request a reduction or waiver of prepayments?
Yes. Email your request to our tax experts. Include at least the following:
- Company name and WAOIC# or NAIC#,
- Whether you are seeking a reduction or a waiver, and for which prepayments, and
- The reason why - reduction in business volume, company in run-off, etc.
Requests received in the same month in which the payment is due will generally not be considered. For example, if a request for waiver is sent June 3 for all three quarters, we will review the request for Quarters 2 and 3, but not Quarter 1.
Are prepayments due if my company merges into another company?
Yes. Prepayments will continue to be due for the merged-away company through the end of the year, unless you specifically contact us and request a combined or revised billing.
What if I do not make my payment on time?
Penalties are applied in stages - 5, 10 and 20 percent.
Payments not made by the end of the month in which the payment is due are subject to a 5 percent penalty.
If your payment is not made within 45 days of the due date, there is an additional 5 percent due, for a total of 10 percent.
Payments that are not made within 60 days of the due date are subject to a total 20 percent penalty.
Payments 61 days or later are subject to the 20 percent penalty, plus interest.
These terms are described in Revised Code of Washington (RCW) 48.14.060 (leg.wa.gov).