Instructions For Form 1120-W - 2012 (Page 2 of 4) in pdf

Line 17. Tax Credits

An immediate catchup payment should be made to reduce

the amount of any penalty resulting from the underpayment of

For information on tax credits the corporation can take, see the

any earlier installments, whether caused by a change in

2011 Instructions for Form 1120, Schedule J, lines 5a through

estimate, failure to make a deposit, or a mistake.

5e, or the instructions for the applicable lines and schedule of

other income tax returns.

Line 19. Other Taxes

Specific Instructions

For information on other taxes the corporation may owe, see

the 2011 Instructions for Form 1120, Schedule J, line 9, or the

Line 1. Qualified Personal Service Corporations

instructions for the applicable line and schedule of other income

tax returns.

A qualified personal service corporation is taxed at a flat rate of

35% on taxable income. A corporation is a qualified personal

Line 21. Credit for Federal Tax Paid on Fuels

service corporation if it meets both of the following tests.

See Form 4136, Credit for Federal Tax Paid on Fuels, to find

•

Substantially all of the corporation’s activities involve the

out if the corporation qualifies to take this credit. Also include on

performance of services in the fields of health, law, engineering,

line 21 any other refundable credit, including any credit the

architecture, accounting, actuarial science, performing arts, or

corporation is claiming under section 4682(g)(2) for tax on

consulting.

ozone-depleting chemicals.

•

At least 95% of the corporation’s stock, by value, is owned,

directly or indirectly, by employees performing the services

Line 23a. 2011 Tax

listed above, retired employees who had performed such

Figure the corporation’s 2011 tax in the same way that line 22

services, any estate of an employee or retiree described above,

of this worksheet was figured, using the taxes and credits from

or any person who acquired the stock of the corporation as a

the 2011 income tax return. Large corporations, see the

result of the death of an employee or retiree (but only for the

instructions for line 25 below.

2-year period beginning on the date of the employee’s or

If a return was not filed for the 2011 tax year showing a

retiree’s death). See Temporary Regulations section

liability for at least some amount of tax or the 2011 tax year was

1.448-1T(e) for details.

for less than 12 months, do not complete line 23a. Instead, skip

Lines 2, 5, and 8. Members of a Controlled

line 23a and enter the amount from line 22 on line 23b.

Group

Line 24. Installment Due Dates

Members of a controlled group, complete lines 2, 5, and 8 as

Calendar-year taxpayers: Enter 4-17-2012, 6-15-2012,

follows:

•

9-17-2012, and 12-17-2012, respectively, in columns (a)

Enter on line 2 the smaller of the amount on line 1, or the

through (d).

member’s share of the $50,000 amount.

•

Enter on line 5 the smaller of the amount on line 4, or the

Fiscal-year taxpayers: Enter the 15th day of the 4th, 6th,

member’s share of the $25,000 amount.

9th, and 12th months of your tax year in columns (a) through

•

Enter on line 8 the smaller of the amount on line 7, or the

(d). If the due date falls on a Saturday, Sunday, or legal holiday,

member’s share of the $9,925,000 amount.

enter the next business day.

Equal apportionment plan. If no apportionment plan is

Line 25. Required Installments

adopted, members of a controlled group must divide the

Payments of estimated tax should reflect any 2011

amount in each taxable income bracket equally among

overpayment that the corporation chose to credit against its

themselves. For example, Controlled Group AB consists of

2012 tax. The overpayment is credited against unpaid required

Corporation A and Corporation B. They do not elect an

installments in the order in which the installments are required

apportionment plan. Therefore, each corporation is entitled to:

•

to be paid.

$25,000 (one-half of $50,000) on line 2,

•

$12,500 (one-half of $25,000) on line 5, and

If the corporation uses the annualized income installment

•

$4,962,500 (one-half of $9,925,000) on line 8.

method and/or the adjusted seasonal installment method, is a

‘‘large corporation,’’ or has assets of $1 billion or more, see the

Unequal apportionment plan. Members of a controlled group

instructions below.

can elect an unequal apportionment plan and divide the taxable

income brackets as they want. There is no need for consistency

Annualized income installment method and/or adjusted

among taxable income brackets. Any member may be entitled

seasonal installment method. If the corporation’s income is

to all, some, or none of the taxable income bracket. However,

expected to vary during the year because, for example, it

the total amount for all members cannot be more than the total

operates its business on a seasonal basis, it may be able to

amount in each taxable income bracket.

lower the amount of one or more required installments by using

the annualized income installment method and/or the adjusted

Line 12. Additional 5% Tax

seasonal installment method. For example, a ski shop, which

Members of a controlled group are treated as one group to

receives most of its income during the winter months, may be

figure the applicability of the additional 5% tax and the

able to benefit from using one or both of these methods in

additional 3% tax. If an additional tax applies, each member will

figuring one or more of its required installments.

pay that tax based on the part of the amount used in each

To use one or both of these methods, complete Schedule A.

taxable income bracket to reduce that member’s tax. See

If Schedule A is used for any payment date, it must be used for

section 1561(a). Each member of the group must enter on line

all payment due dates. To get the amount of each required

12 its share of the smaller of (a) 5% of the taxable income in

installment, Schedule A automatically selects the smallest of (a)

excess of $100,000 or (b) $11,750.

the annualized income installment (if applicable), (b) the

Line 13. Additional 3% Tax

adjusted seasonal installment (if applicable), or (c) the regular

installment under section 6655(d)(1) (increased by any

If the additional 3% tax applies, each member of the controlled

recapture of a reduction in a required installment under section

group must enter on line 13 its share of the smaller of (a) 3% of

6655(e)(1)(B)).

the taxable income in excess of $15 million or (b) $100,000.

See the instructions for line 12 above.

Large corporations. A large corporation is a corporation that

had, or whose predecessor had, taxable income of $1 million or

Line 15. Alternative Minimum Tax (AMT)

more for any of the 3 tax years immediately preceding the 2012

Note. Skip this line if the corporation is treated as a “small

tax year, or if less, the number of years the corporation has

corporation” exempt from the AMT under section 55(e).

been in existence. For this purpose, taxable income is modified

AMT is generally the excess of tentative minimum tax (TMT)

to exclude net operating loss and capital loss carrybacks or

for the tax year over the regular tax for the tax year. A limited

carryovers. Members of a controlled group, as defined in

amount of the foreign tax credit, as refigured for the AMT, is

section 1563, must divide the $1 million amount among

allowed in computing the TMT. Use the 2011 Form 4626 and

themselves according to rules similar to those in section 1561.

the 2011 Instructions for Form 4626 as a guide.

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Instructions for Form 1120-W (2012)

Instructions For Form 1120-W - 2012 Page 2

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