Update: I see what you're saying. You're saying that the tax based on annualized income in the first two quarters was more than $0 but less than $1000, but you you didn't pay 90% of the appropriate fraction based on quarter of that tax in the first two quarters. You were expecting to be able to use the "less than $1000" rule to not have to pay the penalty despite having paid no withholding or estimated taxes. But the "less than $1000" rule does not apply in the Annualized Income Installment Method or to estimated tax payments in general. I believe you are correct, that you will have a small underpayment penalty in the first two quarters. The "less than $1000" rule is not described as a "safe harbor" but rather an "exception to penalty". So I guess you cannot rely on the "less than $1000" rule if you want to be guaranteed to avoid the underpayment penalty. The only sure way to avoid the penalty with uncertain future income, is to either pay based on 100% or 110% of last year's income, or pay based on 90% of the annualized income based on the current year quarters so far.
If you pay the correct amount of estimated taxes for the last 2 quarters under the Annualized Income Installment Method, you will not have an underpayment penalty. You will have to elect to use the Annualized Income Installment Method and include Form 2210 when you file your taxes.
The underpayment penalty is calculated on Form 2210. The safe harbor (100% or 110% of last year's tax, or 90% of this year's tax) is on line 9. The withholding (which for you is 0) is on line 6. Line 9 is more than line 6 so you will proceed to Parts II and III. You will check box C (Annualized Income Installment Method) in Part II.
You will fill out Schedule AI for the Annualized Income Installment Method. For the first 2 quarters, you have not much income from the first 2 quarters, so you would not have any tax on that, and you would not be expected to have paid any estimated tax in the first 2 quarters. Then, you will take the income from the first 3 quarters (which consists of just the 3rd quarter for you), divide by 8/12, calculate the tax on that, and you would be expected to have paid 90% of that in the first 3 quarters (which is just 3rd quarter since you were not expected to pay anything in the first 2 quarters). Then you will take the income from the whole year, calculate the tax on that, and you would be expected to have paid that in all 4 quarters (the 4th quarter expected amount is just the total expected minus the amount expected in the first 3 quarters).
These amounts from Schedule AI would transfer onto Form 2210 line 10, and you will only have amounts in the 3rd and 4th quarter boxes. Your estimated taxes paid in each quarter will go in line 11. If line 11 is greater than line 10 for each quarter, then you have no underpayment penalty. (Or if you have more excess in the 3rd quarter that can be applied forward to the 4th quarter to cover the deficit there, you will calculate in the lines 12-18 that there is no underpayment penalty.)
