Instructions For Form Cf-2210, Underpayment Of Estimated Tax

2004 INSTRUCTIONS FOR FORM CF-2210, UNDERPAYMENT OF ESTIMATED TAX

For example, if you have an underpayment on line 22,

3. The payment listed in Table 1 did not reduce the

column (a), but show no payments in Table 1, you would

underpayment to zero, and no other payments

enter 61 on line 24, column (a).

Make one or more computations for

are listed.

column (a) on lines 24 and 26.

This second

The following line by line instructions apply only to

computation is to figure the interest on the

column (a) of Section B. If there is an underpayment

underpayment balance; that is, the portion of the

shown in column (b), (c) or (d) on Line 22, complete

underpayment that remained unpaid for the entire

lines 24 through 33 for those columns in a similar

period.

In this case, you would enter another

manner.

number in the entry space for lines 24 and 26. As

follows:

Interest Rate Period 1

a. On line 24, enter “61.” This is the total number of

Line 24

days in the period. See total days in rate period on

Enter on line 24, column (a), the number of days from

page 2.

4/30/2004 to the date of the first payment listed in Table

b. On line 26, make the computation and enter the

1. If no payments are made enter “61.”

result. In this case, however, the “underpayment’ in

the computation is the remaining balance of the

Example 1. You had an underpayment of $500 on line

underpayment.

22 and your first payment shown in the table was made

on 5/15/2004 in the amount of $300. Enter “15” on line

Example 4. Assume the same facts as in Examples 1

24, column (a) (days from 4/30 to 5/15).

and 2.

After applying the $300 payment, the

underpayment balance is $200. Line 26, therefore, will

Line 28

contain the second entry of $4.11 ($200 x 61 days x

Make the computation requested on line 2 and enter the

0.0003366). Go to line 27 to figure the interest on the

result.

Note that the computation calls for the

underpayment for Rate Period 2.

“underpayment on line 22.” The amount you use as the

“underpayment” depends on whether or not a payment is

4. Additional payments are listed in Table 1 and the

listed in Table 1.

first payment was not enough to reduce the

underpayment to zero. On line 22 you may list the

If there is a payment listed in Table 1. On a separate

amounts and the payment dates that apply to the

sheet of paper, apply the payment to the underpayment

underpayment for that installment period.

Then

shown on line 22.

The ‘underpayment’ for the

figure the penalty for each amount listed on line 22.

computation on line 26 is the amount of the payment

If an underpayment balance remains after applying

applied to the line 22 underpayment. If the payment is

all the payments, figure the interest on the balance

more than the underpayment, apply only an amount

of the underpayment for the entire period. See Total

equal to the underpayment and use that amount for the

days per rate period on page 2

line 26 computation.

Example 5. Your underpayment for column (a) is $500

Example 2. Assume the same facts as in Example 1.

and you made two payments: $300 on 5/15/2004 and

Because you paid $300 toward the underpayment enter

$200 on 6/22/2004. On line 22, you can enter $500 or

$1.51 on line 26 ($300 x 15 x 0.0003366).

enter each payment and date separately, which will

Example 3. Your underpayment on line 22 was $500

correspond with the two entries on lines 24 and 26 as

and you paid $800 on 5/15/2004.

Because your

explained below.

payment was more than your underpayment, you would

Line 24 will show two entries in column (a) as follows:

apply $500 to the underpayment. Enter $2.62 on line 26

“15” days (from 4/30 to 5/15) and “53” days (from 4/30 to

($500 x 15 x 0.0003366).

6/22).

The

If there are no payments listed in Table 1.

Line 26 will show two entries in column (a) as follows:

“underpayment” is the entire underpayment balance.

$1.51 ($300 x 15 days x 0.0003366) and $3.57 ($200 x

Determine

You

Need

Make

Additional

53 days x 0.0003366).

Computations for Column (a)

Example 6. Your underpayment on line 22, column (a),

Whether you need to make additional computations

is $800 and you made two payments: $300 on 5/15/2004

depends on which of the following conditions apply to

and $300 on 6/22/2004. Lines 24 and 26 will each show

you.

three entries in column (a), one for each payment and a

1. The first (or only) payment listed in Table 1 was

third for the balance due of $200 ($800 minus $600).

enough to reduce the underpayment to zero.

There are no further computations to make for

Line 24 will show “15” days (from 4/30 to 5/15), “53”

column (a).

Figure the interest for any other

days (from 4/30 to 6/22) and “61” days (from 4/30 to

underpayments shown in line 23, columns (b) – (d).

6/30).

2. No payments are listed in Table 1. You will need

Line 26 will show $1.51, $5.35 and $4.11, computed as

to figure the interest for the next interest rate period.

follows: $300 x 15 x 0.0003366 (first payment), $300 x

See Rate Period 2 on page 2.

Page 3 of 4

Instructions For Form Cf-2210, Underpayment Of Estimated Tax - 2004 Page 3

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