Department of the Treasury
Internal Revenue Service
Methods of Tax Payment
Section references are to the Internal Revenue Code unless
Some corporations (described below) are required to
electronically deposit all depository taxes, including estimated
Electronic Deposit Requirement
For the latest information about developments affecting Form
1120-W and its instructions, such as legislation enacted after
Corporations must use electronic funds transfer to make all
they were published, go to
federal tax deposits (such as deposits of employment, excise,
and corporate income tax). This includes installment payments
of estimated tax. Generally, electronic funds transfer is made
using the Electronic Federal Tax Payment System (EFTPS).
Corporations with assets of $1 billion or more (determined as of
However, if the corporation does not want to use EFTPS, it can
the end of the corporation's preceding tax year), must increase
arrange for its tax professional, financial institution, payroll
the required installment of estimated tax due in July, August, or
service, or other trusted third party to make electronic deposits
September of 2017 by 0.25% of the amount that otherwise
on its behalf. Also, it may arrange for its financial institution to
would have been due for that installment. The amount of the next
initiate a same-day tax wire payment (discussed below) on its
required installment would be decreased by an equal amount to
behalf. EFTPS is a free service provided by the Department of
reflect the increase in the previous installment.
the Treasury. Services provided by a tax professional, financial
institution, payroll service, or other third party may have a fee.
To get more information about EFTPS or to enroll in EFTPS,
Who Must Make Estimated Tax
Depositing on time. For deposits made by EFTPS to be on
time, the corporation must submit the deposit by 8 p.m. Eastern
Corporations generally must make estimated tax payments if
time the day before the date the deposit is due. If the corporation
they expect their estimated tax (income tax less credits) to be
uses a third party to make deposits on its behalf, they may have
$500 or more.
different cutoff times.
S corporations must make estimated tax payments for certain
Same-day wire payment option. If the corporation fails to
taxes. S corporations should see the Instructions for Form
submit a deposit transaction on EFTPS by 8 p.m. Eastern time
1120S, U.S. Income Tax Return for an S Corporation, to figure
the day before the date a deposit is due, it can still make the
their estimated tax payments.
deposit on time by using the Federal Tax Collection Service
Tax-exempt corporations, tax-exempt trusts, and domestic
(FTCS). Before using the same-day wire payment option, the
private foundations must make estimated tax payments for
corporation will need to make arrangements with its financial
certain taxes. These entities should see the instructions for their
institution ahead of time. Please check with the financial
tax return, to figure the amount of their estimated tax payments.
institution regarding availability, deadlines, and costs. To learn
When To Make Estimated Tax
more about the information the corporation will need to provide
its financial institution to make a same-day wire payment, visit
and click on Same-day wire.
The installments generally are due by the 15th day of the 4th,
Foreign corporations. If a foreign corporation maintains an
6th, 9th, and 12th months of the tax year. If any due date falls on
office or place of business in the United States, it must use
a Saturday, Sunday, or legal holiday, the installment is due on
electronic funds transfer (as discussed above) to make
the next regular business day.
installment payments of estimated tax.
Underpayment of Estimated Tax
If the foreign corporation does not maintain an office or place
of business in the United States, it may pay the estimated tax by
A corporation that does not make estimated tax payments when
EFTPS if it has a U.S. bank account. The foreign corporation
due may be subject to an underpayment penalty for the period of
may also arrange for its financial institution to submit a same-day
underpayment. Use Form 2220, Underpayment of Estimated
payment on its behalf or can arrange for either a qualified
Tax by Corporations, to see if the corporation owes a penalty
intermediary, tax professional, payroll service, or other trusted
and to figure the amount of the penalty. See Form 2220 and the
third party to make a deposit on its behalf using a master
instructions for Form 2220.
Overpayment of Estimated Tax
In addition, the foreign corporation has the option to pay the
estimated tax due by check or money order, payable to the
A corporation that has overpaid its estimated tax may apply for a
“United States Treasury.” To ensure proper crediting, enter the
quick refund if the overpayment is at least 10% of its expected
foreign corporation's EIN, “Form 1120-F (or 1120-FSC, if
income tax liability and at least $500. To apply, file Form 4466,
applicable) estimated tax payment,” and the tax period to which
Corporation Application for Quick Refund of Overpayment of
the payment applies on the check or money order. The
Estimated Tax, after the end of the tax year and before the
payments must be sent to the Internal Revenue Service Center,
corporation files its income tax return. See the instructions for
P.O. Box 409101, Ogden, UT 84409.
Dec 16, 2016
Cat. No. 52102x