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Department of the Treasury

Internal Revenue Service

Instructions for Form 2210

Underpayment of Estimated Tax by Individuals, Estates, and Trusts

Section references are to the Internal Revenue Code.

complete certain lines. If you use the

Special Rules for Farmers and

General Instructions

short method, you must complete lines

Fishermen

1 – 17. If you use the regular method, you

If you meet both tests 1 and 2 below, you

A Change To Note

must complete lines 1 – 9 and lines

do not owe a penalty for underpaying

18 – 33. If you use the annualized

For 2003, the requirement to avoid the

estimated tax.

installment method (you checked box C),

penalty based on your prior year’s tax for

1. Your gross income from farming

you must complete lines 1 – 9, Schedule

certain higher income taxpayers is figured

and fishing is at least

of your annual

AI, and lines 18 – 33 of Part IV.

using 110% of the tax shown on your

gross income from all sources for 2002 or

2002 tax return. See Who Must Pay the

2003.

Underpayment Penalty on this page.

2. You filed Form 1040 or 1041 and

Who Must Pay the

paid the entire tax due by March 1, 2004.

Purpose of Form

Underpayment Penalty

See Pub. 505, Tax Withholding and

Generally, use Form 2210 to see if you

In general, you may owe the penalty for

Estimated Tax, for the definition of gross

owe a penalty for underpaying your

2003 if you did not pay at least the

income from farming and fishing.

estimated tax and, if you do, to figure the

smaller of:

amount of the penalty. If you are not

If you meet test 1 but not test 2, use

1. 90% of the tax shown on your 2003

required to file Form 2210, you may use it

Form 2210-F, Underpayment of

tax return or

to figure your penalty if you wish to do so.

Estimated Tax by Farmers and

Enter the penalty on your return, but do

2. The tax shown on your 2002 tax

Fishermen, to see if you owe a penalty. If

not file Form 2210.

return (110% of that amount if you are not

you do not meet test 1, use Form 2210.

a farmer or fisherman and your adjusted

Who Must File Form 2210

Waiver of Penalty

gross income (AGI) shown on that return

In most cases you do not need to file

is more than $150,000, or, if married filing

If you have an underpayment, all or part

Form 2210. The IRS will figure any

separately for 2003, more than $75,000).

of the penalty for that underpayment will

penalty you owe and send you a bill. See

be waived if the IRS determines that:

The IRS Will Figure the Penalty for You

1. In 2002 or 2003, you retired after

Note: In these instructions, “return” refers

below. Read the chart at the top of page 1

age 62 or became disabled and your

to your original return. However, an

of Form 2210 to see if you need to file

underpayment was due to reasonable

amended return is considered the original

Form 2210.

cause; or

return if it is filed by the due date

2. The underpayment was due to a

The IRS Will Figure the

(including extensions) of the original

casualty, disaster, or other unusual

return. Also, a joint return that replaces

Penalty for You

circumstance and it would be inequitable

previously filed separate returns is

to impose the penalty.

Because Form 2210 is complicated, we

considered the original return.

strongly encourage you to let us figure the

To request a waiver, do the following.

The penalty is figured separately for

•

penalty. If you owe it, we will send you a

Check box A or B in Part II.

each installment due date. Therefore, you

•

bill. And as long as you file your return by

If you checked box B, complete Form

may owe the penalty for an earlier due

April 15, 2004, we will not charge you

2210 through line 16 (line 32 if you use

date even if you paid enough tax later to

interest on the penalty if you pay by the

the regular method) without regard to the

make up the underpayment. This is true

date specified on the bill.

waiver. Write the amount you want

even if you are due a refund when you file

If you want us to figure the penalty for

waived in parentheses on the dotted line

your tax return. However, you may be

you, complete your return as usual. Leave

next to line 17 (line 33 for the regular

able to reduce or eliminate the penalty by

the penalty line on your return blank; do

method). Subtract this amount from the

using the annualized income installment

not file Form 2210.

total penalty you figured without regard to

method. See the Schedule AI instructions

the waiver, and enter the result on line 17

beginning on page 4 for details.

See Part II of the form. If box B,

(line 33 for the regular method).

C, or D is checked, you must

•

Attach Form 2210 and a statement to

figure the penalty yourself and

CAUTION

Exceptions to the Penalty

your return explaining the reasons you

attach a completed Form 2210 to your

were unable to meet the estimated tax

You will not have to pay the penalty if

return.

requirements and the time period for

either 1 or 2 applies.

which you are requesting a waiver.

Other Methods

1. You had no tax liability for 2002,

•

If you are requesting a waiver due to

you were a U.S. citizen or resident for the

We realize that there are different ways to

retirement or disability under 1 above,

entire year, and your 2002 tax return was

figure the correct penalty. You do not

attach documentation that shows your

(or would have been had you been

have to use the method prescribed by

retirement date (and your age on that

required to file) for a full 12 months.

Form 2210 as long as you enter the

date) or the date you became disabled.

•

correct penalty amount on the penalty line

2. The total tax shown on your 2003

If you are requesting a waiver due to a

of your return.

return minus the amount of tax you paid

casualty, disaster, or other unusual

through withholding is less than $1,000.

However, if you are required to file

circumstance under 2 above, attach

To determine whether the total tax is less

Form 2210 because one or more of the

documentation such as copies of police

boxes in Part II applies to you, you must

than $1,000, complete lines 1 – 7.

and insurance company reports.

Cat. No. 63610I

Instructions For Form 2210 - Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - 2003

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