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Exception A – Prior Year’s Tax

organizations use the annualization amounts for

estimate installment on the next business day,

the Standard Option or Option 1.)

consider it paid on the due date.

Regular Corporations

Note: Days means calendar days unless

Generally, this exception applies if the amount

Annualization Amounts

otherwise noted.

paid or credited on or before the installment due

Installment

1st

2nd

3rd

4th

date equals or exceeds the tax shown on the

Line 12 – Enter the number of days from the

Standard option

1.33333

return for the preceding year, prorated to each

installment due date (line 2) to the date shown

Option 1

1.71429

1.2

installment. For banks and financial corporations,

on line 11.

Option 2

2.4

1.5

1.09091

the tax shown on the return includes the amount

Line 13 – Enter the number of days on line 12

of the bank and financial tax rate adjustment.

that are before 7/1/98 or the payment date,

The return for the preceding year must have

whichever is earlier.

Attach form FTB 5806 to the front of Form 100,

covered a full 12 months.

Form 100S or Form 109 only if Exception B is

Line 14 – Enter the number of days on line 12

‘‘Large’’ Corporations

used in computing or eliminating the penalty. Be

that fall within the period after 6/30/98 and before

A large corporation is any bank or corporation,

sure to check the penalty box on Form 100,

7/1/99 or the payment due date, whichever is

including a predecessor bank or corporation, that

line 42; Form 100S, line 42; or Form 109, line 29.

earlier.

had California net income (computed without

Calendar year corporations – Enter the number

Exception C – Tax on Annualized Seasonal

regard to the net operating loss deduction) of

of days on line 12 that fall within the period after

Income

$1 million or more for any income year during the

6/30/98 and before 3/15/99 or the payment date,

three income years immediately preceding the

This exception applies if the estimated tax paid

whichever is earlier. The total of line 13 and

current income year.

on or before the installment due date was equal

line 14 cannot be more than the number of days

to or more than the amount the corporation

This exception allows a large corporation to use

shown on line 12. Skip line 15 and line 16 and

would owe if its estimated tax was computed on

prior year’s tax for the 1st installment only. The

proceed to line 17.

annualized seasonal taxable income for the

difference between using the prior year’s tax and

Line 15 — For fiscal year corporations only,

months preceding an installment due date. Use

the current year’s tax for the 1st installment must

enter the number of days on line 12 that fall

Exception C only if the corporation’s base period

have been added to the 2nd installment (calcu-

within the period after 6/30/99 and before 1/1/00

percentage for any 6 consecutive months of the

lated using current year’s tax) to meet the excep-

or the payment date, whichever is earlier.

income year equals or exceeds 70%. Get the

tion.

federal instructions for Form 2220, Underpay-

Line 16 – For fiscal year corporations only,

Installments 3 and 4

ment of Estimated Tax by Corporations, for more

enter the number of days on line 12 that fall

Because Exception A for large corporations can

information on the base period percentage.

within the period after 12/31/99 and before

only be used for the 1st two installments, you

2/15/00 or the payment date, whichever is

Attach form FTB 5806 to the front of Form 100,

must use the amounts computed in Part I or

earlier. The total days on line 13 through line 16

Form 100S or Form 109 only if Exception C is

Exception B or Exception C, column (c) and col-

cannot be more than the number of days shown

used in computing or eliminating the penalty. Be

umn (d) for your 3rd and 4th installments.

on line 12.

sure to check the penalty box on Form 100,

line 42; Form 100S, line 42; or Form 109, line 29.

Line 17 – Divide the number of days shown on

Exception B – Tax on Annualized Current

line 13 by the number of days in the income

Year Income

Part III Figure the Penalty

year. Multiply the result by 9% and by the under-

This exception applies if the estimated tax paid

paid amount shown on line 7.

If line 7 shows an underpayment for any install-

on or before the installment due date was equal

ment and the corporation did not meet one of the

Line 18 – Divide the number of days shown on

to or more than the amount the corporation

exceptions in Part II, complete the penalty com-

line 14 by the number of days in the income

would owe if its estimated tax was computed on

putation on line 11 through line 22.

year. Multiply the result by 9% and by the under-

annualized taxable income for the months pre-

paid amount shown on line 7.

ceding an installment due date.

Figure the penalty on the underpayment on

line 7, from the installment due date to the return

Line 19 and Line 20 – Divide the number of

For each period, in column (a) through column

due date (excluding extension of time) or to the

days shown on line 15 or line 16, by the number

(d), enter the number of months for the annuali-

payment date, whichever is earlier.

of days in the income year. Multiply the result by

zation method used based on the table below.

the percentage, which FTB will determine at a

For example, if a Form 100 is filed and the Stan-

Additional payments

later date. Then multiply the result by the under-

dard Option was used, enter 3 in column (a), 3 in

If the corporation made additional payments for

paid amount shown on line 7.

column (b), 6 in column (c) and 9 in column (d).

an installment, figure the penalty on the revised

Penalty Rates – Call FTB’s phone service, Fast

Annualization Periods

underpaid amount (amount on line 7 minus the

Answers about State Taxes (F.A.S.T.), to get

amount of the last payment) from the last pay-

Installment

1st

2nd

3rd

4th

updated penalty rates.

ment date to the return due date (excluding

Standard option

extension of time) or to the date of the next pay-

For the interest rate for line 19, call after March

Option 1

ment, whichever is earlier. Attach a separate

1999. For the interest rate for line 20, call after

Option 2

computation for each additional payment.

September 1999.

If the prior year’s tax was the minimum fran-

How to Use F.A.S.T.

Corporations can use the Standard Option or

chise tax and the corporation is not a large

must elect to use Option 1 or Option 2. Exempt

F.A.S.T. is available in English and Spanish to

corporation, figure the penalty on the mini-

organizations use Option 1 (the standard option

callers with touch-tone telephones.

mum franchise tax.

for exempt organizations) or elect to use

F.A.S.T. general tax information, is available 24

Option 2. The election to use an expanded

Line 11 – Enter the date payment was made or

hours a day, seven days a week.

option must be made on or before the due date

the return due date (excluding extension of time),

From within the United States

of the first required installment payment. Get the

whichever is earlier.

call. . . . . . . . . . . . . . . .

(800) 338-0505

instructions for the 1998 Form 100-ES, Corpora-

Form 109 filers – Enter the date payment was

tion Estimated Tax, for more information.

From outside the United States

made, or the 15th day of the 5th month after the

call (not toll free) . . . . . . . .

(916) 845-6600

Line 32 – Enter on line 32, column (a) through

close of the income year, whichever is earlier.

column (d), the annualization amounts for the

After you reach the F.A.S.T. number, select

If the installment due date fell on a Saturday,

option used. For example, if a Form 100 is filed

general tax information, follow the recorded

Sunday or a holiday and the corporation paid the

and the Standard Option was used, on line 32,

instructions and enter code number 403 to get

enter 4 in column (a), 4 in column (b), 2 in col-

the updated penalty rate.

umn (c) and 1.33333 in column (d). (Exempt

Page 2 FTB 5806 Instructions 1998

Instructions For Form Ftb 5806 - Underpayment Of Estimated Tax By Corporations - 1998 Page 2

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