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Page 1 of 6 Instructions for Form 2210

10:12 - 18-OCT-2011

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2011

Department of the Treasury

Internal Revenue Service

Instructions for Form 2210

Underpayment of Estimated Tax by Individuals, Estates, and Trusts

complete certain lines and enter the penalty on the “Estimated

Section references are to the Internal Revenue Code unless

tax penalty” line of your return.

otherwise noted.

•

If you use the short method, complete Part I, check the

General Instructions

box(es) that applies in Part II, and complete Part III. Enter the

penalty on line 17 and on the “Estimated tax penalty” line on

More information. For more information about the latest

your tax return.

developments on Form 2210 and its instructions, go to

•

If you use the regular method, complete Part I, check the

gov/form2210.

box(es) that applies in Part II, complete Part IV, Section A, and

the Penalty Worksheet on page 4 of the instructions. Enter the

What’s New

penalty on line 27 of the form, and on the “Estimated tax

Temporary decrease in employee’s share of payroll tax.

penalty” line on your tax return.

•

Social security tax is withheld from an employee’s wages at the

If you use the annualized income installment method,

rate of 4.2% (down from 6.2%) up to the social security wage

complete Part I, check the box(es) that applies in Part II, and

limit of $106,800. There is no change to Medicare withholding.

complete Schedule AI, Part IV, Section A, and the Penalty

Worksheet on page 4 of the instructions. Enter the penalty on

The same reductional applies to the net earnings from

line 27 of the form, and on the “Estimated tax penalty” line on

self-employment — the temporary rate will be 10.4% (down from

your tax return.

12.4%) up to the social security wage limit of $106,800.

Advance earned income credit. The advance earned income

Who Must Pay the

credit (EIC) was eliminated. If you are a household employer

Underpayment Penalty

and made advance EIC payments, you do not include those

payments as estimated tax payments.

In general, you may owe the penalty for 2011 if the total of your

Refundable claim of right credit. If you are reclaiming a

withholding and timely estimated tax payments did not equal at

credit for repayment of amounts you included in your income in

least the smaller of:

an earlier year under a claim of right, you should include the

1. 90% of your 2011 tax, or

credit in Part I, line 3 of Refundable credits.

2. 100% of your 2010 tax. (Your 2010 tax return must cover

Product page. The IRS has created a page on IRS.gov for

a 12-month period.)

information about Form 2210 and its instructions, at

gov/form2210. Information about any recent developments

Special rules for certain individuals. Different percentages

affecting Form 2210 will be posted on that page.

are used for farmers and fishermen, and certain higher income

taxpayers.

Purpose of Form

Farmers and fishermen. If at least two-thirds of your gross

Generally, use Form 2210 to see if you owe a penalty for

income for 2010 or 2011 is from farming and fishing, substitute

underpaying your estimated tax and, if you do, to figure the

% for 90% in (1) above. See Farmers and fishermen on

amount of the penalty. Even if you are not required to file Form

page 2 to see if you qualify.

2210, you can use it to figure your penalty if you wish to do so.

Higher income taxpayers. If your adjusted gross income

In that case, enter the penalty on your return, but do not file

(AGI) for 2010 was more than $150,000 ($75,000 if your 2011

Form 2210.

filing status is married filing separately), substitute 110% for

100% in (2) above.

Who Must File Form 2210

Penalty figured separately for each required payment. The

Use the flowchart at the top of page 1 of Form 2210 to see if

penalty is figured separately for each installment due date.

you must file this form.

Therefore, you may owe the penalty for an earlier due date

If box B, C, or D in Part II is checked, you must figure

even if you paid enough tax later to make up the underpayment.

the penalty yourself and attach Form 2210 to your

This is true even if you are due a refund when you file your tax

return.

return. However, you may be able to reduce or eliminate the

CAUTION

penalty by using the annualized income installment method. For

The IRS Will Figure the Penalty for You

details, see the Schedule AI instructions beginning on page 5.

Return. In these instructions, “return” refers to your original

If you did not check box B, C, or D in Part II, you do not need to

return. However, an amended return is considered the original

figure the penalty or file Form 2210. The IRS will figure any

return if it is filed by the due date (including extensions) of the

penalty for underpayment of estimated tax and send you a bill.

original return. Also, a joint return that replaces previously filed

If you file your return by April 17, 2012, no interest will be

separate returns is considered the original return.

charged on the penalty if you pay the penalty by the date shown

on the bill.

Exceptions to the Penalty

If you want us to figure the penalty for you, complete your

You will not have to pay the penalty if either of the following

return as usual. Leave the penalty line on your return blank; do

applies.

not file Form 2210.

•

You had no tax liability for 2010, you were a U.S. citizen or

Other Methods of Figuring the Penalty

resident alien for the entire year (or an estate of a domestic

decedent or a domestic trust), and your 2010 tax return was (or

We realize that there are different ways to figure the correct

would have been had you been required to file) for a full 12

penalty. You do not have to use the method used on Form 2210

months.

as long as you enter the correct penalty amount on the

•

The total tax shown on your 2011 return minus the amount of

“Estimated tax penalty” line of your return.

tax you paid through withholding is less than $1,000. To

However, if you are required to file Form 2210 because one

determine whether the total tax is less than $1,000, complete

or more of the boxes in Part II applies to you, you must

Part 1, lines 1 through 7.

Oct 18, 2011

Cat. No. 63610I

Instructions For Form 2210 - Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - 2011

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