US estimated tax: who must pay quarterly with Form 1040-ES

In the US, income tax is a pay-as-you-go tax: it is paid during the year, and if it isn't covered by withholding from your wages, you have to prepay it yourself, without being asked. The IRS sends no assessments and no reminders. This page shows who is affected, which thresholds apply, the due dates, how to pay and what happens if you miss an installment. How the payments fit into your return and your deadlines is covered in the main guide US tax obligations for Europeans.

1Why the IRS wants its money during the year

The IRS calls this estimated tax. It is the tax on income with no withholding or too little: profits from self-employment or a business in the US, interest, dividends, rent, and even wages if too little is withheld. The payments cover not only income tax but also self-employment tax, where it applies to you.

Which form you use depends on your status. Residents, meaning green card holders and anyone who meets the Substantial Presence Test, calculate and pay with Form 1040-ES. Nonresidents use Form 1040-ES (NR). Which status applies to you is explained in the guide Resident or nonresident alien.

This matters especially for nonresidents with a US rental property. If you treat the rent as business income so you can deduct expenses and depreciation, no tax is withheld at source on the profit anymore, so you usually have to prepay the tax yourself. Everything else about renting out is in the article Taxes for US property owners.

2Who has to pay

The law, 26 U.S.C. § 6654, and the IRS forms set a two-part test. In most cases you must make estimated payments if both apply:

• You expect to owe at least $1,000 in tax for the year after subtracting withholding and refundable credits.
• Your withholding and refundable credits will cover less than the smaller of two amounts: 90 percent of this year's tax, or 100 percent of the tax shown on last year's return, provided that return covered a full year.

If your adjusted gross income last year was over $150,000 (over $75,000 if married filing separately), use 110 instead of 100 percent of last year's tax. These thresholds are the safe harbors: reach them with on-time installments and you owe no penalty, even if you still have a balance due with your return.

You don't need to make estimated payments if you were a US citizen or resident for the whole of last year and owed no tax for that full year, for example because you didn't have to file. This exception does not apply to nonresidents. In your first year with US income you have no prior-year return, so you can't rely on the 100 percent and must estimate 90 percent of this year's tax.

Employees with US wages have an easier route: they can ask their employer to withhold more tax by filing a new Form W-4. Withholding counts as paid evenly over the year, even if it was only increased in the fall, unless you choose to apply it on the actual dates.

3Due dates: four installments or three

Residents, and nonresidents with US wages subject to withholding, pay four equal installments. For tax year 2026 they are due April 15, June 15 and September 15, 2026, and January 15, 2027. You can skip the last one if you file your 2026 return by February 1, 2027 and pay the full balance with it. You can also pay everything at once by the first due date.

Nonresidents without such wages follow their own schedule under 26 U.S.C. § 6654(j), matching their June 15 filing deadline. They pay in three installments: half by June 15, then a quarter each by September 15 and by January 15 of the following year. So if you rent out an apartment in Florida from January 1 and are taxed on the net rent, your first and largest installment is due in June.

If your income jumps during the year, say from a sale in the summer, you recalculate the remaining installments. A penalty can still arise for the due dates already past. The Annualized Income Installment Method softens this: it lets you base each installment on the income you actually earned up to that point. If you use it, attach Form 2210 with Schedule AI to your return, even if no penalty ends up being due.

4How to calculate the amount

The IRS provides a worksheet for this: the Estimated Tax Worksheet in Form 1040-ES and Form 1040-ES (NR). Your starting point is last year's return. You estimate this year's income, subtract the deductions you're entitled to, work out the tax at this year's rates, subtract credits and expected withholding, and split the rest across the installments. As a nonresident, the Form 1040-NR rules apply: no standard deduction and, if you're married, usually the married filing separately rates. You can apply a refund from last year to your estimated payments instead of taking it.

You can't make joint estimated payments with your spouse if one of you is a nonresident, unless you have elected to both be treated as residents. In the year you arrive or leave, when you have dual status, the calculation follows that year's special rules, explained in the guide Your arrival year and departure year.

4.1Two worked examples

The first rental apartment. An Austrian woman, a nonresident alien for the IRS, has rented out an apartment in the US since January, is taxed on the net rent and expects $8,000 in US tax for the year. There's no withholding and no prior-year return. So she has to prepay 90 percent of this year's tax, $7,200, in three installments: $3,600 by June 15, then $1,800 each by September 15 and by January 15. She pays the remaining $800 with her return, with no penalty.

The well-paid second year. A resident from Switzerland had adjusted gross income of $200,000 last year and $12,000 in tax on his return. This year he also earns consulting fees with no withholding. To be safe, he covers 110 percent of last year's tax, $13,200, in four installments of $3,300 each. If this year's tax turns out higher, he pays the difference with his return, with no penalty. How to legally lower the tax your payments are based on is shown in the article on legal tax strategies for expats in the USA.

Both examples are our own calculations under the rules of the forms and assume the installments arrive on time.

5How to pay

Payments to the IRS are made in US dollars; it does not accept digital assets. The IRS asks you to pay electronically and offers several ways:

• your own IRS online account,
• IRS Direct Pay, a free transfer from a checking or savings account,
• paying by debit or credit card or digital wallet through the IRS's payment processors, which charge a fee,
• the Treasury's Electronic Federal Tax Payment System (EFTPS), online or by phone,
• an electronic funds withdrawal when you e-file your return.

If you pay by mail, use the payment voucher from the form for each installment, with a check or money order payable to "United States Treasury", marked "2026 Form 1040-ES (NR)" and your taxpayer ID number. The address for Form 1040-ES (NR) is IRS, P.O. Box 1303, Charlotte, North Carolina. For a payment mailed in the US, the date of the US postmark counts.

You don't need an ITIN yet to make an estimated payment. If you don't have one, write "ITIN TO BE REQUESTED" in place of the taxpayer ID number on the voucher and don't attach Form W-7. You apply for the ITIN later with your return; the guide Form W-7 and the ITIN documents shows how.

6Missed an installment: the penalty

If you pay too little or too late, you owe a penalty that the IRS calculates separately for each installment and for every day the amount was outstanding. It applies even if you paid enough over the year as a whole or end up with a refund, because what counts is each individual due date. The calculation uses Form 2210 and the interest rate on tax underpayments that the IRS sets every quarter. For 2026, that rate is between 6 and 7 percent a year.

There is no penalty if the tax shown on your return, after withholding, is under $1,000. The IRS can waive it in full or in part if the underpayment was caused by a casualty, disaster or other unusual circumstance and the penalty would be inequitable, or if you retired after age 62 or became disabled during the year or the year before and the underpayment had reasonable cause. You request the waiver with Form 2210, along with an explanation and supporting documents.

The penalty is separate from the interest and penalties that apply if your tax is not paid by the filing deadline. An extension with Form 4868 only pushes back the filing of the return, not the payment. Our guide US tax return deadline and extension explains how the deadlines fit together. If you would rather not work out the estimated payments and the return yourself, we take care of both: your US tax return.

In short

• If you have income without enough tax withheld, you prepay your US income tax during the year: residents with Form 1040-ES, nonresidents with Form 1040-ES (NR).
• As a rule, it is required once you expect to owe $1,000 or more and your withholding covers less than 90 percent of this year's tax or 100 percent of last year's (110 percent for higher incomes).
• Nonresidents with no US wages subject to withholding pay in three installments, with half due on June 15; everyone else pays in four installments starting April 15.
• You don't need an ITIN yet to make estimated payments; the IRS calculates underpayment penalties at the quarterly interest rate, day by day.

How we help you

• Your US Tax ReturnForm 1040 or 1040-NR, handled in English.
• US Tax ConsultationYour US tax question, answered by people who know both sides.
• ITIN ExpressYour ITIN through our special procedure, no tax return needed.