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Line 30

To use the annualized income installment method to figure

the penalty, you must do all of the following.

Make the computation requested on line 30 and enter the

1. Complete Schedule AI, Part I (and Part II, if necessary).

result. If more than one payment was required to fully satisfy

Enter the amounts from Schedule AI, Part I, line 25, columns

the underpayment amount, you will need to make a separate

(a) through (d), in the corresponding columns of Form 2210,

computation for each payment. See the examples below and in

Part IV, line 18.

chapter 4 of Pub. 505.

2. Complete Part IV to figure the penalty.

Example 5. Assume the same facts as in Example 4. On

3. Check box C in Part II.

line 30, enter the penalty for each underpayment: “3.29”

4. Attach Form 2210, Parts I, II, IV, and Schedule AI to your

($2,000 × (15 ÷ 365) × .04) and “$20.05” ($3,000 × (61 ÷ 365) ×

return.

.04). The entries are illustrated below.

Additional information. See Pub. 505, chapter 4, for more

(a)

details about the annualized income installment method and a

4/15/09

completed example. Estates and trusts, see Notice 87-32.

Days:

Individuals filing Form 1040NR or 1040NR-EZ. If you are

filing Form 1040NR or 1040NR-EZ and you did not receive

wages as an employee subject to U.S. income tax withholding,

follow these modified instructions for Schedule AI.

3.29

1. Skip column (a).

20.05

2. Enter on line 1 your income for the period that is

effectively connected with a U.S. trade or business.

Since the underpayment balance in column (a) is fully

3. Increase the amount on line 17 by the amount

satisfied, next go to column (b). See Example 6 below.

determined by multiplying your income for the period that is not

Example 6. Assume the same facts as in Example 4 and

effectively connected with a U.S. trade or business by the

Example 5. Because payments are applied first to an

following.

•

underpayment balance in an earlier period, your June 15

In column (b), 72%.

•

payment of $3,000 was fully applied to the underpayment

In column (c), 45%.

•

amount in column (a). Therefore, your second required

In column (d), 30%.

installment of $5,000 is fully underpaid.

However, if you can use a treaty rate lower than 30%, use

the percentages determined by multiplying your treaty rate by

The next unapplied payment is $4,000 made on 9/15/09. On

2.4, 1.5, and 1, respectively.

line 29, column (b), enter “92” the number of days from 6/15 to

4. Enter on line 22, column (b), one-half of the amount from

9/15 when the next unapplied payment was made. Also enter

Form 2210, Part I, line 9. In columns (c) and (d), enter

“214,” the number of days from 6/15 until the 1/15/10 estimated

one-fourth of that amount.

tax payment was made. $1,000 of the $4,000 unapplied

5. Skip column (b), lines 20 and 23.

payment was applied to the June 15 underpayment. On line 30,

column (b), enter “$40.33” ($4,000 × (92 ÷ 365) × .04) and

“$23.45” ($1,000 × (214 ÷ 365) × .04).

Part I—Annualized Income Installments

To figure the amount of each required installment, Schedule AI

(a)

(b)

selects the smaller of the annualized income installment or the

4/15/09

6/15/09

regular installment (that has been increased by the amount

Days:

saved by using the annualized income installment method in

figuring any earlier installments).

214

Line 1

For each period (column), figure your total income minus your

3.29

40.33

adjustments to income. Include your share of partnership or S

20.05

23.45

corporation income or loss items for the period.

If you are self-employed, be sure to take into account the

Figure the remaining underpayment for column (c) and

deduction for one-half of your self-employment tax. To figure

column (d) in the same manner.

this amount for each period, complete Schedule AI, Part II, and

Schedule AI—Annualized Income

divide the amount in columns (a) through (d) on line 34 by 8,

4.8, 3, and 2, respectively.

Installment Method

Line 2

If your income varied during the year because, for example, you

Estates and trusts do not use the amounts shown in columns

operated your business on a seasonal basis or had a large

(a) through (d). Instead, use 6, 3, 1.71429, and 1.09091,

capital gain late in the year, you may be able to lower or

respectively, as the annualization amounts.

eliminate the amount of one or more required installments by

using the annualized income installment method. Use Schedule

Line 6

AI to figure the required installments to enter on Form 2210,

If you itemized your deductions, multiply line 4 of each column

Part IV, line 18.

by line 5 and enter the result on line 6. But if line 3 is more than

If you use Schedule AI for any payment due date, you

$166,800 ($83,400 if married filing separately), use the Itemized

must use it for all payment due dates.

Deductions Worksheet — Line 6 on page 6 to figure the amount

CAUTION

to enter on line 6.

-5-

Instructions for Form 2210

Instructions For Form 2210 - Underpayment Of Estimated Tax By Individuals, Estates, And Trusts - 2009 Page 5

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