California Form 5806 - Underpayment Of Estimated Tax By Corporations - 2011 Page 5
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5Line 5b – Enter the overpayment from the previous
Installments 3 and 4 – Because Exception A for
on line 13 through line 17 cannot be more than the
installment. However, if an underpayment existed on
large corporations can only be used for the 1st
number of days shown on line 12.
any prior installment, pay that underpayment first.
two installments, the corporation must use the
Line 8 – Divide the number of days shown on
amounts computed in Part I or Exception B or
Line 7 – If line 7 shows an underpayment for
line 13 by the number of days in the taxable year.
Exception C, column (c) and column (d) for the
any installment, complete Part IV, Exceptions
Multiply the result by 4% and by the underpaid
corporation’s 3rd and 4th installments.
Worksheets, and Part II, Exceptions to the Penalty,
amount shown on line 7.
for that installment.
Exception B – Tax on Annualized Current Year
Line 9 – Divide the number of days shown on
Income
Part II Exceptions to the Penalty
line 14 by the number of days in the taxable year.
Multiply the result by 3% and by the underpaid
This exception applies if the estimated tax paid on
The FTB will not assess a penalty if all of the
amount shown on line 7.
or before the installment due date was equal to or
estimated tax was paid on time and the payments
more than the amount the corporation would owe
Line 20 – Divide the number of days shown on
satisfied the exception rules. A corporation may
if its estimated tax was computed on annualized
line 15 by the number of days in the taxable year.
qualify for more than one exception. Complete
taxable income for the months preceding an
Multiply the result by 4% and by the underpaid
Part IV, Exceptions Worksheets, to see if the
installment due date.
amount shown on line 7.
corporation qualifies to use any of the exceptions.
For each period, in column (a) through column (d),
Line 2 and Line 22 – Divide the number of days
California difference: Under California law, the
enter the number of months for the annualization
shown on line 16 or line 17 by the number of
exceptions are computed on a cumulative basis. This
method used based on the table below. For
days in the taxable year. Multiply the result by the
differs from federal law which requires only 25% of
example, if a Form 100 is filed and the Standard
percentage, which the FTB will determine at a later
the annual payment for each installment.
Option was used, enter 3 in column (a), 3 in
date. Then multiply the result by the underpaid
column (b), 6 in column (c), and 9 in column (d).
Part III Figure the Penalty
amount shown on line 7.
Annualization Periods and Options
Penalty Rates – To get updated penalty rates, go to
If line 7 shows an underpayment for any
ftb.ca.gov and search for penalty rates or call the
Installment
1st
2nd
3rd
4th
installment and the corporation did not meet any
FTB automated phone system using the telephone
of the exceptions in Part II, complete the penalty
Standard Option
3
3
6
9
number listed below.
computation on line 11 through line 22.
Option
2
4
7
10
For the interest rate for line 21, call after
Figure the penalty on the underpayment on line 7,
Option 2
3
5
8
11
March 2012. For the interest rate for line 22, call
from the installment due date to the return due date
Corporations can use the Standard Option or
after September 2012.
(excluding extension of time) or to the payment
must elect to use Option 1 or Option 2. Exempt
date, whichever is earlier.
How to Use the Automated Phone System
organizations use Option 1 (the Standard Option
Additional Payments – If the corporation made
for exempt organizations) or elect to use Option 2.
The system is available in English and Spanish to
additional payments for an installment, figure the
callers with touch-tone telephones.
The election to use an expanded option must be
penalty on the revised underpaid amount (amount
made on or before the due date of the first required
General tax information is available 24 hours a day,
on line 7 minus the amount of the last payment)
installment payment. Get the instructions for the
seven days a week.
from the last payment date to the return due date
2011 Form 100-ES, Corporation Estimated Tax, for
Telephone: 800.338.0505 from within
(excluding extension of time) or to the date of
more information.
the United States
the next payment, whichever is earlier. Attach a
Line 32 – Enter on line 32, column (a) through
separate computation for each additional payment.
916.845.6500 from outside
column (d), the annualization amounts for the option
the United States
Line – Enter the date payment was made or
used. For example, if a Form 100 is filed and the
the return due date (excluding extension of time),
Standard Option was used, on line 32, enter 4 in
After you reach the number, select business entity
whichever is earlier.
column (a), 4 in column (b), 2 in column (c), and
information, then frequently asked questions,
1.33333 in column (d). (Exempt organizations use
follow the recorded instructions, and enter code
Form 09 Filers – Enter the date payment was made,
the annualization amounts for the Standard Option or
number 403 to get the updated estimated penalty
or the 15th day of the 5th month after the close of
Option 1.) See the instructions under “Purpose” for
rate.
the taxable year, whichever is earlier.
information on where to attach form FTB 5806.
Part IV Exceptions Worksheets
When the due date falls on a weekend or holiday,
Annualization Amounts
the deadline to file and pay without penalty is
Newly formed or qualified corporations are not
extended to the next business day.
Installment
1st
2nd
3rd
4th
subject to the minimum franchise tax for the first
Standard Option
4
4
2
1.33333
Days means calendar days unless otherwise noted.
taxable year. However, the corporation is required
Option
6
3
1.71429
1.2
to make estimated tax payments for its first taxable
Line 2 – Enter the number of days from the
year. The estimated payments will be based on the
Option 2
4
2.4
1.5
1.09091
installment due date (line 2) to the date shown on
corporation’s expected tax liability after credits. For
line 11.
Exception C – Tax on Annualized Seasonal Income
more information, see page 1, Newly Formed or
Line 3 – Enter the number of days on line 12 that
This exception applies if the estimated tax paid on
Qualified Corporations under Purpose section.
are before 7/01/11 or the payment date, whichever
or before the installment due date was equal to or
Exception A – Prior Year’s Tax
is earlier.
more than the amount the corporation would owe
Line 4 – Enter the number of days on line 12 that
Regular Corporations – Generally, this exception
if its estimated tax was computed on annualized
fall within the period after 6/30/11 and before
applies if the amount paid or credited on or before
seasonal taxable income for the months preceding
1/01/12 or the payment due date, whichever is
the installment due date equals or exceeds the
an installment due date. Use Exception C only if
earlier.
tax shown on the return for the preceding year,
the corporation’s base period percentage for any
prorated to each installment. For banks and
six consecutive months of the taxable year equals
Line 5 – Enter the number of days on line 12 that
financial corporations, the tax shown on the return
or exceeds 70%. Get the instructions for federal
fall within the period after 12/31/11 and before
includes the amount of the bank and financial tax
Form 2220, Underpayment of Estimated Tax by
7/01/12 or the payment due date, whichever is earlier.
rate adjustment. The return for the preceding year
Corporations, for more information on the base
Calendar year corporations – Enter the number of
must have covered a full 12 months.
period percentage. See the instructions under
days on line 12 that fall within the period after
“Purpose” for information on where to attach form
“Large” Corporations – A large corporation is any
6/30/11 and before 3/15/12 or the payment date,
FTB 5806.
corporation, including a predecessor corporation,
whichever is earlier. The total of line 13 through
that had California net income (computed without
line 15 cannot be more than the number of days
regard to the net operating loss deduction) of
shown on line 12. Skip line 16 and line 17 and
$1 million or more for any taxable year during the
proceed to line 18.
three taxable years immediately preceding the
Line 6 – For fiscal year corporations only, enter
current taxable year.
the number of days on line 12 that fall within the
Installments and 2 – This exception allows a
period after 6/30/12 and before 1/01/13 or the
large corporation to use prior year’s tax for the 1st
payment date, whichever is earlier.
installment only. The difference between using the
Line 7 – For fiscal year corporations only, enter
prior year’s tax and the current year’s tax for the
the number of days on line 12 that fall within the
1st installment must have been added to the 2nd
period after 12/31/12 and before 2/15/13 or the
installment (calculated using current year’s tax) to
payment date, whichever is earlier. The total days
meet the exception.
Page 2 FTB 5806 Instructions 2011
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