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“s” corporations or partnerships, net operating loss deductions or capital losses which may reduce the total Delaware

“s” corporation’s estimated tax liability, are due on or before the first day of the fourth month of the taxable year. T h e

ESTIMATED TAX FILING REQUIREMENTS

Section 1158 requires everv “s” corporation to make estimated payments on behalf of the “S” corporation’s non-resident

s h a r e h o l d e r s . The amount of estimated tax to be paid on behalf of the non-resident shareholders is equal to the highest

marginal rate of tax set forth in Section 1102(a) (5.95%) multiplied by the non-resident’s Delaware distributive share of the

income of the “s” corporation. The computation of the estimated tax does not include distributions from other Delaware

p e r s o n a l i n c o m e t a x o f t h e n o n - r e s i d e n t s h a r e h o l d e r .

Each corporation must estimate the amount of Delaware personal

income tax for each non-resident shareholder based solely on the distribution from each “S” corporation.

Every “s” corporation with non-resident shareholders is required to declare the amount of its estimated tax liability and

prepay the amount of its estimated tax liability in four installments. The declaration, and remittance equal to 50% of the

declaration (Form P-1) is due even if the estimated tax liability is zero and no remittance is required.

The remaining

coupons -- P-2, P-3 and P-4 -- are not required to be filed if the estimated tax liability remains at zero for the remainder ot

t h e t a x a b l e y e a r . If the estimated tax liability is greater than zero during any of the remaining three quarters of the taxable

year, quarterly tentative tax payments are due according to the following schedule: ZO%on the 15th day of the 6th month

o f t h e t a x a b l e y e a r ; 2 0 % on the 15th day of the 9th month of the taxable year and 10% on the 15th day of the 12th

m o n t h o f t h e t a x a b l e y e a r .

Failure to make a declaration or file and pay the required payments of personal income tax will result in a penalty. A

penalty of l%% per month is imposed on any underpayment or late payment of estimated tax. Such penalty will not be

imposed if the total estimated tax paid equals or exceeds 80% of the current years liability or equals or exceeds 100%

of the tax liability of the first preceding taxable year.

Corporations whose Delaware taxable income was $200,000 or more in any of the last three preceding taxable years must

make estimated payments equal to 80% of the current year’s tax liability.

If the “S” corporation fails to make estimated tax payments on behalf of each non-resident shareholder, Section 1158(c)

requires the “s” corporation to be responsible for any penalties, interest and additions to tax as a resuft of the nonpayment

of the estimated tax.

Section 1158(c) exempts the non-resident shareholder from any penalties, interest and additions to

tax as a result of the nonpayment of the estimated tax with respect to the non-resident’s Delaware distributive share from

the “s” corporation.

Any overpayment of estimated tax paid on behalf of the non-resident shareholders must be included proportionally in the

amount of estimated tax claimed by the non-resident shareholders upon the filing of their Delaware non-resident personal

i n c o m e t a x r e t u r n . A r e f u n d w i l l n o t b e i s s u e d d i r e c t l y t o t h e “S” c o r p o r a t i o n f o r a n y o v e r p a y m e n t o f e s t i m a t e d t a x

p a i d o n b e h a l f o f t h e n o n - r e s i d e n t s h a r e h o l d e r s . E s t i m a t e d t a x p a i d o n b e h a l f o f t h e n o n - r e s i d e n t s h a r e h o l d e r s s h o u l d

be claimed by the non-resident shareholders on their Delaware personal income tax return.

SPECIFIC LINE INSTRUCTIONS FOR FORM 1100-P

LINE 1

Enter on Line 1 the total amount of personal income tax required to be paid on behalf of the non-resident

s h a r e h o l d e r s . The amount of personal income tax required to be paid may be computed by the following

f o r m u l a :

A) Estimate the amount of distributive income for the taxable year.

B ) T o t a l t h e p e r c e n t a g e o f s t o c k o w n e d b y t h e n o n - r e s i d e n t s h a r e h o l d e r s .

C) Determine the corporation’s apportionment percentage using the standard three factors.

D) Multiply Ax B x C x 5.95%. Enter the result on Line 1.

L I N E 2 Multiply Line 1 by the percentage indicated on the voucher and enter the result on Line 2.

This is the

amount of tax that is due and payable with the filing of this return.

Form 1100-P - Instructions For Personal Income Tax Payments By "S" Corporations - State Of Delaware Page 3

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