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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.

you use the regular method, you must

gross income from all sources for 2001 or

General Instructions

complete lines 1 – 15 and lines 23 – 31 and

2002.

enter the penalty on line 36.

2. You filed Form 1040 or 1041 and

A Change To Note

paid the entire tax due by March 3, 2003.

Who Must Pay the

For 2002, the requirement to avoid the

See Pub. 505, Tax Withholding and

penalty based on your prior year’s tax for

Underpayment Penalty

Estimated Tax, for the definition of gross

certain higher income taxpayers is figured

income from farming and fishing.

In general, you may owe the penalty for

using 112% of the tax shown on your

2002 if you did not pay at least the

2001 tax return. See Who Must Pay the

If you meet test 1 but not test 2, use

smaller of:

Underpayment Penalty on this page.

Form 2210-F, Underpayment of

1. 90% of the tax shown on your 2002

Estimated Tax by Farmers and

Purpose of Form

tax return or

Fishermen, to see if you owe a penalty. If

2. The tax shown on your 2001 tax

Generally, use Form 2210 to see if you

you do not meet test 1, use Form 2210.

return (112% of that amount if you are not

owe a penalty for underpaying your

a farmer or fisherman and your adjusted

estimated tax and, if you do, to figure the

Waiver of Penalty

gross income (AGI) shown on that return

amount of the penalty. However, you do

If you have an underpayment on line 19

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

not need to file Form 2210 in most

(line 30 if you use the regular method), all

separately for 2002, more than $75,000).

cases. The IRS will figure any penalty

or part of the penalty for that

you owe and send you a bill (see

underpayment will be waived if the IRS

Note: In these instructions, “return” refers

below). File Form 2210 only if one or

determines that:

to your original return. However, an

more of the boxes in Part I of Form

amended return is considered the original

2210 apply to you. If you are not

1. In 2001 or 2002, you retired after

return if it is filed by the due date

required to file Form 2210, you may

age 62 or became disabled and your

(including extensions) of the original

use it to figure your penalty if you wish

underpayment was due to reasonable

return. Also, a joint return that replaces

to do so. Enter the penalty on your

cause; or

previously filed separate returns is

return, but do not file Form 2210.

2. The underpayment was due to a

considered the original return.

casualty, disaster, or other unusual

The IRS Will Figure the

The penalty is figured separately for

circumstance and it would be inequitable

each installment due date. Therefore, you

Penalty for You

to impose the penalty.

may owe the penalty for an earlier due

To request a waiver, do the following.

Because Form 2210 is complicated, we

date even if you paid enough tax later to

•

strongly encourage you to let us figure the

Check the box on line 1a.

make up the underpayment. This is true

•

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

Complete Form 2210 through line 21

even if you are due a refund when you file

bill. And as long as you file your return by

your tax return. However, you may be

(line 35 if you use the regular method)

April 15, 2003, we will not charge you

able to reduce or eliminate the penalty by

without regard to the waiver. Write the

interest on the penalty if you pay by the

using the annualized income installment

amount you want waived in parentheses

date specified on the bill.

method. See the Schedule AI instructions

on the dotted line next to line 22 (line 36

beginning on page 4 for details.

If you want us to figure the penalty for

for the regular method). Subtract this

you, complete your return as usual. Leave

amount from the total penalty you figured

Exceptions to the Penalty

the penalty line on your return blank; do

without regard to the waiver, and enter

not file Form 2210.

You will not have to pay the penalty if

the result on line 22 (line 36 for the

either 1 or 2 applies.

regular method).

See Part I of the form. If any of

•

1. You had no tax liability for 2001,

Attach Form 2210 and a statement to

the boxes on line 1 apply, you

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

your return explaining the reasons you

must figure the penalty yourself

CAUTION

entire year, and your 2001 tax return was

were unable to meet the estimated tax

and attach a completed Form 2210 to

(or would have been had you been

requirements and the time period for

your return.

required to file) for a full 12 months.

which you are requesting a waiver.

•

2. The total tax shown on your 2002

Other Methods

If you are requesting a waiver due to a

return minus the amount of tax you paid

casualty, disaster, or other unusual

We realize that there are different ways to

through withholding is less than $1,000.

circumstance under 2 above, attach

figure the correct penalty. You do not

To determine whether the total tax is less

documentation such as copies of police

have to use the method prescribed by

than $1,000, complete lines 2 – 13.

and insurance company reports.

Form 2210 as long as you enter the

•

correct penalty amount on the penalty line

If you are requesting a waiver due to

Special Rules for Farmers and

of your return.

retirement or disability under 1 above,

Fishermen

attach documentation that shows your

However, if you are required to file

retirement date (and your age on that

If you meet both tests 1 and 2 below, you

Form 2210 because one or more of the

date) or the date you became disabled.

do not owe a penalty for underpaying

boxes in Part I applies to you, you must

estimated tax.

The IRS will review the information you

complete certain lines. If you use the

provide and decide whether to grant your

short method, you must complete lines

1. Your gross income from farming

request for a waiver.

1 – 19 and enter the penalty on line 22. If

and fishing is at least

of your annual

Cat. No. 63610I

Instructions For Form 2210 - Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - 2002

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