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Form 63-20-23 Instructions

Who Must File Form 63-20-23?

below. Insurance companies making estimated payments must use

Form 355-ES to make their payments.

All classes of foreign life insurance companies on accident and

health business subject to MGL Ch. 63, secs. 23, 24 and 24A must

For taxable years ending on or after December 31, 1989, estimated

file Form 63-20-23.

tax installments are paid as follows:

All foreign life insurance companies subject to MGL Ch. 63, secs. 20,

Pct. of

21 and 24A must file Form 63-20-23.

estimated

Due date from start

Installment no.

tax due

of taxable year

A foreign company is any company organized or formed in any state

or country other than Massachusetts.

40%

15th day of 3rd month

25%

15th day of 6th month

When Must Form 63-20-23 be Filed?

25%

15th day of 9th month

Form 63-20-23, together with payment in full of any excise due, must

10%

15th day of 12th month

be filed on or before the 15th day of the third month after the close of

the company’s taxable year.

Note: New corporations in their first full taxable year with less than

10 employees have different estimated payment percentages — 30%,

May an Insurance Company Obtain an Extension

25%, 25% and 20% respectively.

of Time to File?

Special Optical Character Readable payment vouchers are mailed to

Yes. Form 63-20-23 filers may request a six-month extension of time

all companies that have made estimated payments or should be mak-

to file by submitting Massachusetts Form 355-7004 Misc. on or before

ing estimated payments. These special forms are easier to fill out and

the original due date. Any tax due at the time of filing Form 355-7004

facilitate processing.

Misc. must be paid in full.

Insurance companies that underpay, or fail to pay, their estimated

Note: An extension of time to file is not valid if the company fails to

taxes may incur an additional penalty on the amount of the under-

pay at least 50% of the total tax liability through estimated payments

payment for the period of the underpayment. Form M-2220, Under-

or using Form 355-7004 Misc.

payment of Massachusetts Estimated Tax by Corporations, is used to

What Are the Penalties for Late Returns?

compute the additional charge.

Insurance excise returns that are not filed on or before the due date

Any corporation having $1 million or more of federal taxable income

are subject to interest and penalty charges. The penalty for failure to

¹ ₂% of the balance due per month

in any of its three preceding taxable years (as defined in Section

pay the amount due with this form is

6655(g) of the Internal Revenue Code (IRC)) may only use its prior

(or fraction thereof), up to a maximum of 25% of the tax reported as

year’s tax liability to calculate its first quarterly estimated tax pay-

due on the return. A late payment penalty does not apply to amended

ment. Any reduction in the first installment payment that results from

returns when the amount shown on the original return was paid.

using this method must be added to the second installment payment.

The penalty for failure to file a return by the due date is 1% of the bal-

A company that claims the exception to the underpayment penalty of

ance due per month (or fraction thereof), up to a maximum of 25%.

equaling the prior year’s tax liability must provide federal tax re-

Any tax not paid on or before the due date — without regard to the

turns (one page only) for the three preceding taxable years to verify

extension — is subject to interest.

that federal taxable income is less than $1 million.

What is a Valid Return?

Note: Any insurance company required to file more than one type of

A valid return is one upon which all required amounts have been entered

excise return must also file separate estimated tax payment vouchers

in all appropriate items on the form. Applicable forms and documents

since each type of tax is governed by a different section of the Mass-

may be attached to explain these amounts. Referencing items to at-

achusetts General Laws.

tachments instead of properly entering all amounts onto the return is

For more information on corporate estimated taxes, refer to MGL,

not sufficient. The return must be signed by either the treasurer or

Chapter 63B.

assistant treasurer of the company.

How Is the Excise Determined?

To be valid, a Form 63-20-23 must also include a copy of Schedule T,

Foreign Accident & Health insurance companies are taxed on net di-

Exhibit of Premiums Written or Form 1 from the NAIC Annual Statement.

rect premiums for insurance of property or interest in Massachusetts.

Reproduction of returns must be approved by DOR prior to filing and

Foreign life insurance companies are taxed on all new and renewal

meet the criteria provided in Technical Information Release 95-8.

policies issued during the preceding calendar year if the insured is a

Failure to meet any of the requirements detailed in this section may

resident of Massachusetts at the time the premium was paid.

result in a penalty for filing an insufficient return. Such a penalty may

Are Combined Returns Allowed?

be assessed at double the amount of the tax due.

No. Foreign insurance companies are not allowed to participate in fil-

When are Estimated Tax Payments Required?

ing combined returns.

Any insurance company that reasonably estimates its excise to be in

Line Instructions

excess of $1,000 for the taxable year is required to make estimated

tax payments to the Commonwealth. Estimated taxes may be paid in

Registration Information

full on or before the 15th day of the third month of the company’s tax-

Enter the company’s federal employer identification number and the

able year or in four installment payments according to the schedule

state of incorporation next to the name and address of the company.

Form 63-20-23 - Premium Excise Return For Foreign Life Insurance Companies On Life, Accident And Health Business - 2003 Page 3

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