Instructions For Form 2220 - Underpayment Of Estimated Tax By Corporations

2012

Department of the Treasury

Internal Revenue Service

Instructions for Form 2220

Underpayment of Estimated Tax by Corporations

Section references are to the Internal Revenue Code unless

the due date (including extensions) of the original return.

otherwise noted.

Also, for purposes of determining a required installment, if an

amended return is filed for the prior tax year, then "prior tax

Future Developments

year" includes the amended return, but only if the amended

return is filed before the applicable installment due date.

For the latest information about developments affecting Form

The penalty is figured separately for each installment due

2220 and its instructions, such as legislation enacted after

date. Therefore, the corporation may owe a penalty for an

they were published, go to

earlier due date even if it paid enough tax later to make up

the underpayment. This is true even if the corporation is due

What's New

a refund when its return is filed. However, the corporation

may be able to reduce or eliminate the penalty by using the

Repeal of adjustments for 2012. The special rules under

annualized income installment method or the adjusted

PL 112-41 and PL 112-43 that applied to estimated tax

seasonal installment method. See the instructions for Part II

payments for certain corporations for the period that includes

for details.

July, August, or September of 2012 have been repealed and

no longer apply.

Exception to the Penalty

A corporation will not have to pay a penalty if the tax shown

General Instructions

on the corporation's 2012 return (the Part I, line 3 amount) is

less than $500.

Purpose of Form

How To Use Form 2220

Corporations (including S corporations), tax-exempt

organizations subject to the unrelated business income tax,

Complete lines 1 through 3 of Part I. If line 3 is $500 or

and private foundations use Form 2220 to determine:

more, complete the rest of Part I to determine the required

Whether they are subject to the penalty for underpayment

annual payment and go to Part II.

of estimated tax and, if so,

Check one or more boxes in Part II if the corporation uses

The amount of the underpayment penalty for the period

the adjusted seasonal installment method, the annualized

that applies.

income installment method, or if the corporation is a large

corporation.

Who Must File

If the corporation checked a box in Part II, attach Form

Generally, the corporation does not have to file this form with

2220 to the income tax return. Be sure to check the box on

its income tax return because the IRS will figure the amount

line 33, page 1 of Form 1120; or the comparable line of any

of any penalty and notify the corporation of any amount due.

other income tax return the corporation is required to file (for

However, even if the corporation does not owe a penalty,

example, Form 1120-C, 1120-L, or 1120S).

complete and attach this form to the corporation's tax return if

Complete Part III to determine the underpayment for any of

the Part I, line 3 amount is $500 or more and any of the

the installment due dates.

following apply.

If there is an underpayment on Part III, line 17 (column (a),

1. The adjusted seasonal installment method is used.

(b), (c), or (d)), go to Part IV to figure the penalty.

Complete Schedule A if the corporation uses the adjusted

2. The annualized income installment method is used.

seasonal installment method and/or the annualized income

3. The corporation is a large corporation (as defined in

installment method.

the instructions for Part II, line 8) figuring its first required

installment based on the prior year's tax.

Specific Instructions

Who Must Pay the Underpayment

Part I. Required Annual Payment

Penalty

Complete lines 1 through 5 to figure the corporation's

Generally, a corporation is subject to the penalty if it did not

required annual payment.

timely pay at least the smaller of:

1. The tax shown on its 2012 return, or

Line 1. Generally, enter the tax from Form 1120, line 31; or

the applicable line for other income tax returns. However, if

2. The tax shown on its 2011 return (if it filed a 2011

that amount includes any tax attributable to a sale described

return showing at least some amount of tax and the return

in section 338(a)(1), do not include that tax on line 1. Instead,

was for a full 12 months). However, a large corporation can

write “Sec. 338 gain” and show the amount of tax in brackets

base only its first required installment on the prior year's tax.

on the dotted line next to line 1. This exclusion from the line 1

In these instructions, “return” generally refers to the

amount does not apply if a section 338(h)(10) election is

corporation's original return. However, an amended return is

made.

considered the original return if the amended return is filed by

Dec 06, 2012

Cat. No. 64293P

Instructions For Form 2220 - Underpayment Of Estimated Tax By Corporations - 2012

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