When you file your tax return and you're owed a refund, you can choose to put some or all of it toward next year's estimated taxes instead of having it sent to you. For example, a refund from your 2025 return can be applied to your 2026 estimated taxes. The IRS applies the amount starting with your Q1 payment and rolls any remaining balance into the following quarters until the full refund is used. It's a simple way to get a head start on the year ahead.
Recording the refund in your Quarterly Tax Checklist
Once your refund has been applied, you can record it in your Quarterly Tax Checklist, so your estimates stay accurate. There are two ways to do this.
Option 1: Enter the full refund in Q1 (recommended)
Entering the original full refund amount as a Q1 payment allows the credit to carry over into Q1 and every quarter after. This is the simplest approach, and it keeps your estimates aligned without extra steps.
Option 2: Enter the credit quarter by quarter
You can also record the portion of the refund used each quarter as it's applied. For example, with a $3,500 refund and a $1,500 estimate in Q1, you'd enter a $1,500 payment in Q1. That leaves $2,000 in credit for Q2 and beyond, applied until it runs out, after which your payments return to normal.