Annualized Income Installment Worksheet For Underpayment Of Estimated Tax (Page 3 of 3) in pdf

INSTRUCTIONS FOR FORM 2220ME

PURPOSE OF FORM:

Form 2220ME will enable corporations

The penalty may be avoided if at least 90% of the 2002 tax was

and financial institutions to determine if they paid the correct

paid when due, even though you may be required to file this form.

amount of estimated tax by the proper due date. If the minimum

ACTUAL LIABILITY FOR EACH QUARTER:

amount was not paid timely, an underpayment penalty is imposed

Taxpayers are

for the period of underpayment. This form helps determine

required to make four equal installments of estimated tax unless

whether or not you are subject to this penalty.

the actual liability can be established, by adequate record, for

each required installment payment of estimated tax.

WHO MUST PAY THE UNDERPAYMENT PENALTY:

If you

did not pay enough estimated tax by any due date for paying

COMPUTATION OF UNDERPAYMENT PENALTY:

If no

estimated tax, you may be charged a penalty.

exception applies for an installment date, complete lines 9 through

13 to determine the amount of the penalty. The penalty is based

In general, you may owe the penalty if, for 2002, you did not pay

on the amount of the underpayment of the required installment for

the smaller of 90% of your tax liability for 2002 or 100% of the tax

the period of underpayment. It is computed at the stated rate for

liability for 2001 if the 2001 return covered 12 months. Large

each month or fraction thereof in the period of underpayment. For

corporations, as defined by IRC § 6655(g)(2)(A), must also meet

calendar year 2002, the penalty rate is 0.667% per month or

the test required by 36 M.R.S.A. § 5228(5)(c).

fraction thereof, compounded monthly. For calendar year 2003,

the penalty rate is 0.583%, compounded monthly. The effective

EXCEPTIONS TO THE PENALTY:

You will not have to pay

rate for the number of months shown on line 10 is listed below.

the penalty or file this form if either of the following two situations

applies:

1. Your tax liability for 2002, reduced by allowable credits, is less

than $1,000.

2. Your 2001 tax liability was less than $1,000.

Number of Months

shown on line 10

Enter this Rate

.006667 .013378 .020134 .026935 .033781

.040673 .047610 .054595 .061625

.067818

.074047

on line 11, Column A

Enter this Rate

.006667 .013378 .020134 .026935 .033781

.040673 .047610 .053722 .059868

on line 11, Column B

Enter this Rate

on line 11, Column C

.006667 .013378 .020134 .026935 .032925

.038950

Enter this Rate

on line 11, Column D

.006667 .012539 .018445

NOTE – 30% Federal Bonus Depreciation: If you were required to add-back any federal 30% bonus depreciation on

Form 1120ME, line 4g, you may be able to reduce your Underpayment of Estimated Tax Penalty. Use the worksheet

below to calculate the adjusted 2002 tax for 2220ME, line 1:

Enter amount from 1120ME, line 6 ............................................... $ _____________

Enter amount from 1120ME, line 4g ............................................. $ _____________

Adjusted taxable income (line 1 minus line 2) ............................ $ _____________

Adjusted income tax (find the tax for the amount on

line 3 by using the tax schedule in the 1120ME tax booklet) ........ $ _____________

Enter amount from 1120ME, line 7b (exclude any federal 30%

bonus depreciation add-back from the AMT calculation) ............. $ _____________

Adjusted total tax (line 4 plus line 5) ............................................ $ _____________

Enter amount from 1120ME, line 8c ............................................. $ _____________

Adjusted net tax (line 6 minus line 7) ........................................... $ _____________

(if less than zero, enter zero -- Enter this amount on

Form 2220ME, line 1)

Annualized Income Installment Worksheet For Underpayment Of Estimated Tax Page 3

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