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Arizona Form 220

Include any overpayment of tax from the taxpayer’s 2010

Form 220, Schedule A

Arizona tax return that the taxpayer elected to apply to its 2011

Arizona estimated tax.

Part I - Annualized Income Installment Method

Column (a) Enter payments made by the 15th day of the

Line 1 - Annualization Periods

fourth month.

Enter the annualization period that the taxpayer is using in

Column (b) Enter payments made after the 15th day of the

the space on line 1, columns (a) through (d), respectively.

fourth month through the 15th day of the sixth month.

Column (c) Enter payments made after the 15th day of the

Forms 120, 120A, and 120S

sixth month through the 15th day of the ninth month.

1st

2nd

3rd

4th

Column (d) Enter payments made after the 15th day of the

Option

Installment

ninth month through the 15th day of the 12th month.

Standard option

Line 15 - Underpayment

Option 1

This amount (an amount greater than zero) is the

underpayment of a required installment. If an amount greater

Option 2

than zero is entered here, the taxpayer should complete Part C

to calculate the underpayment penalty.

Form 99T

Part C - Penalty Calculation

1st

2nd

3rd

4th

Option

Installment

The underpayment of estimated tax penalty is imposed on

Standard option

any required installment of estimated tax that is late or

underpaid. The penalty is equal to the interest that would

Option 1

accrue under ARS § 42-1123 on the amount not paid for the

period of nonpayment, not to exceed 10 percent of the

Line 3 - Annualization Amounts

amount not paid.

Enter the annualization amounts for the option used on line 1.

Compute the underpayment penalty for any underpayment of

Forms 120, 120A, and 120S

a required installment for the period of nonpayment on page 2,

Part C, lines 17 through 37. "Underpayment" refers to a late

1st

2nd

3rd

4th

Option

payment or underpayment of a required installment.

Installment

Compute the penalty by applying the applicable rate to each

Standard option

1.33333

underpayment. The penalty is computed for the number of

Option 1

1.71429

1.2

days that the underpayment remained unpaid or until the

original due date of the return, whichever is earlier.

Option 2

2.4

1.5

1.09091

The Arizona interest rates are established at various times

during the year. Arizona interest rates are the interest rates

Form 99T

prescribed by IRC § 6621 for each calendar quarter with the

1st

2nd

3rd

4th

following exception. Exception: The Arizona rate of interest

Option

Installment

for both underpayments and overpayments for all taxpayers

is the federal underpayment rate under IRC § 6621(a)(2) [the

Standard option

1.33333

federal short-term rate, determined pursuant to IRC § 6621(b),

Option 1

1.71429

1.2

plus three percentage points].

Line 5 - Calculate the Tax

If the taxpayer has made more than one payment for a required

installment, attach a separate computation for each payment.

Calculate the tax on the amount in each column using the

instructions for Form 99T, line 4; or Form 120, line 16; or

NOTE FOR COMPOUND PENALTY AMOUNT: The

Form 120A, line 8; or Form 120S, line 12.

penalty is compounded annually (on January 1 of each year)

on any underpayment of an installment outstanding as of that

Line 6 - Tax From Recapture of Tax Credits

date. The compound penalty amount is added to the principal

Enter the amount of tax due from recapture of the

amount of the underpayment. The amount added to the

environmental technology facility and healthy forest

principal accrues penalty until the underpayment is paid or

enterprises tax credits from Form 300, Part II, line 26.

until the original due date of the return, whichever is earlier.

Calculate this amount using the instructions for Form 120,

Line 36 - Penalty Limitation

line 17; or Form 120A, line 9; or Form 120S, line 13. Form 99T

The penalty for an underpayment of a required installment

filers, enter zero.

cannot exceed 10 percent of the amount not paid.

Arizona Form 220 - Underpayment Of Estimated Tax By Corporations Instructions - 2011 Page 4

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