Instructions For Form 1120-W - Estimated Tax For Corporations

2016

Department of the Treasury

Internal Revenue Service

Instructions for

Form 1120-W

Electronic Deposit Requirement

Section references are to the Internal Revenue Code unless

otherwise noted.

Corporations must use electronic funds transfer to make all

federal tax deposits (such as deposits of employment, excise,

Future Developments

and corporate income tax). This includes installment payments

of estimated tax. Generally, electronic funds transfer is made

For the latest information about developments affecting Form

using the Electronic Federal Tax Payment System (EFTPS).

1120-W and its instructions, such as legislation enacted after

However, if the corporation does not want to use EFTPS, it can

they were published, go to

arrange for its tax professional, financial institution, payroll

service, or other trusted third party to make deposits on its

General Instructions

behalf. Also, it may arrange for its financial institution to initiate a

same-day tax wire payment (discussed below) on its behalf.

Who Must Make Estimated Tax

EFTPS is a free service provided by the Department of the

Treasury. Services provided by a tax professional, financial

Payments

institution, payroll service, or other third party may have a fee.

Corporations generally must make estimated tax payments if

To get more information about EFTPS or to enroll in EFTPS,

they expect their estimated tax (income tax less credits) to be

visit

$500 or more.

S corporations must make estimated tax payments for certain

Depositing on time. For deposits made by EFTPS to be on

taxes. S corporations should see the Instructions for Form

time, the corporation must submit the deposit by 8 p.m. Eastern

1120S, U.S. Income Tax Return for an S Corporation, to figure

time the day before the date the deposit is due. If the corporation

their estimated tax payments.

uses a third party to make deposits on its behalf, they may have

Tax-exempt corporations, tax-exempt trusts, and domestic

different cutoff times.

private foundations must make estimated tax payments for

Same-day wire payment option. If the corporation fails to

certain taxes. These entities should see the instructions for their

submit a deposit transaction on EFTPS by 8 p.m. Eastern time

tax return, to figure the amount of their estimated tax payments.

the day before the date a deposit is due, it can still make the

When To Make Estimated Tax

deposit on time by using the Federal Tax Collection Service

(FTCS). Before using the same-day wire payment option, the

Payments

corporation will need to make arrangements with its financial

institution ahead of time. Please check with the financial

The installments generally are due by the 15th day of the 4th,

institution regarding availability, deadlines, and costs. To learn

6th, 9th, and 12th months of the tax year. If any due date falls on

more about the information the corporation will need to provide

a Saturday, Sunday, or legal holiday, the installment is due on

its financial institution to make a same-day wire payment, visit

the next regular business day.

and click on Same-day wire.

Underpayment of Estimated Tax

Foreign corporations. If a foreign corporation maintains an

A corporation that does not make estimated tax payments when

office or place of business in the United States, it must use

electronic funds transfer (as discussed above) to make

due may be subject to an underpayment penalty for the period of

installment payments of estimated tax.

underpayment. Use Form 2220, Underpayment of Estimated

Tax by Corporations, to see if the corporation owes a penalty

If the foreign corporation does not maintain an office or place

and to figure the amount of the penalty. See Form 2220 and the

of business in the United States, it may pay the estimated tax by

Instructions for Form 2220.

EFTPS if it has a U.S. bank account. The foreign corporation

Overpayment of Estimated Tax

may also arrange for its financial institution to submit a same-day

payment on its behalf or can arrange for either a qualified

A corporation that has overpaid its estimated tax may apply for a

intermediary, tax professional, payroll service, or other trusted

quick refund if the overpayment is at least 10% of its expected

third party to make a deposit on its behalf using a master

income tax liability and at least $500. To apply, file Form 4466,

account.

Corporation Application for Quick Refund of Overpayment of

In addition, the foreign corporation has the option to pay the

Estimated Tax, after the end of the tax year and before the

estimated tax due by check or money order, payable to the

corporation files its income tax return. Form 4466 may not be

“United States Treasury.” To ensure proper crediting, enter the

filed later than the 15th day of the 3rd month after the end of the

foreign corporation's EIN, “Form 1120-F (or 1120-FSC, if

tax year.

applicable) estimated tax payment,” and the tax period to which

Methods of Tax Payment

the payment applies on the check or money order. The

payments must be sent to the Internal Revenue Service Center,

Some corporations (described below) are required to

P.O. Box 409101, Ogden, UT 84409.

electronically deposit all depository taxes, including estimated

Refiguring Estimated Tax

tax payments.

If, after the corporation figures and deposits estimated tax, it

finds that its tax liability for the year will be more or less than

originally estimated, it may have to refigure its required

Nov 09, 2015

Cat. No. 52102x

Instructions For Form 1120-W - Estimated Tax For Corporations - 2016

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