Form D-2220 - Underpayment Of Estimated Franchise Tax By Businesses - 2013 Page 2
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1
2Instructions for Underpayment of Estimated Tax by D-20 or D-30 Filers
Completing this form
Estimated Tax Penalty
Line 1
DC law requires any business that expects its DC franchise tax liability to
exceed $1001 for the tax year to fi le a declaration of estimated franchise
Enter the amount from your 2013 D-20 or D-30 (Line 38).
Line 2
tax using the payment vouchers in:
Multiply the amount on Line 1 by 90% (.90). Your estimated franchise
• D-20ES – Declaration of Estimated Franchise Tax for Corporations; or
• D-30ES – Declaration of Estimated Franchise Tax for Unincorporated
tax payments must be equal to or greater than this amount.
Line 3
Businesses.
Enter 110% of the amount from your 2012 DC Forms D-20 or D-30,
Line 37. If your 2012 return was amended or corrected, multiply 110%
The law states that any business required to fi le and pay estimated tax
that fails to pay the amount required by the due date is subject to an
times the corrected amount.
Line 4
underpayment of estimated franchise tax penalty and interest.
Enter the lesser of the amounts on Line 2 and Line 3. If you did not fi le a
When is a penalty assessed for Underpayment of Estimated
DC franchise tax return for 2012, you may only use Line 2. This is your
Franchise Tax?
minimum estimated franchise tax payment for 2013.
A 10% penalty, compounded daily, is assessed if your total DC estimated
Line 5
franchise tax payments compared to your DC franchise tax liability do
Multiply the amount on Line 4 by 25% (.25). This gives you an even
not equal at least the smaller of:
distribution of your tax liability over the four periods of the tax year.
Line 6
• 90% of the tax due (Line 38) on your 2013 DC franchise tax return;
or
Enter the amount required from Line 5 under each of the payment
• 110% of the tax due (Line 38) on your 2012 DC franchise tax return
columns. For example, if Line 5 is $2000, you would enter $2000 for
(consisting of 12 months).
the 1
st
period, $4000 for the 2
nd
period, $6,000 for the 3
rd
period and
You must have fi led a 2012 DC franchise tax return to use the 110%
$8,000 for the 4
th
period.
exception.
Annualized income method: If your income was different for each
period, determine the percentage for each period (divide the period income
A penalty will be assessed if any statement made on an estimated tax
by the full year’s income). Multiply Line 4 by each period’s percentage and
payment voucher is not true and accurate to the best of the signatory’s
enter the amounts earned by period on Line 6. Accumulate the periodic
knowledge.
amounts as shown above. Check the “Annualized Income” box.
Line 7
Are there any exceptions?
Enter the amount of estimated franchise tax payments made in each
You are not subject to the penalty for underpayment of estimated
period. Include the amounts from the previous period with the 2
nd
, 3
rd
and
franchise tax if:
4
th
periods. For example, if your estimated payment amount is $1,000
• You had no DC franchise tax liability for the tax year 2012 and in that
in each period, you would enter $1,000 in the 1
st
period, $2,000 in
year, you did business in DC for the entire 12 months;
nd
rd
th
the 2
period, $3,000 in the 3
period and $4,000 in the 4
period.
• The franchise tax due for 2013, minus any estimated tax payments,
Line 8 Underpayment each period
is less than $1001;
For each column, subtract Line 7 from Line 6. If Line 7 exceeds Line 6,
• Your total DC estimated franchise tax payments are equal to or greater
you have no penalty. If there is an amount remaining, this is your periodic
than 110% of your 2012 DC franchise tax liability for the entire year; or
underpayment amount.
• Your remaining tax due after totaling all credits and estimated tax
Line 9 Penalty Factors
payments is less than 10% of your total DC franchise tax liability (Line
These are the penalty factors by period.
43 of the D-20 and D-30) for the year.
Line 10
For each period, multiply the amount on Line 8 by the factor on Line 9.
When do you use this form?
This is your penalty by period.
Line 11 Penalty
• You may use this form to calculate your penalty. If you do, attach it to
Add the amounts on Line 10 for each period. This is your total
your tax return and add any penalty and interest you calculate to the
underpayment of estimated franchise tax penalty.
amount on Line 41(b) of Forms D-20 or D-30. Fill-in the oval if the
• If you are fi ling the D-2220 with your D-20 or D-30 return, include the
D-2220 is attached. If you do not wish to calculate the penalty and
penalty and any interest on the penalty in the amount you owe, enter
interest, OTR will do it when your return is processed and will notify
the amount on Line 43, and pay the total amount with the return. Fill
you of the amount due.
in the oval on Line 41(b) and attach the D-2220 to the return.
• You may also complete this form if you believe the penalty amount
• If you are fi ling the D-2220 form separately, pay the amount you owe
assessed by OTR for underpayment of estimated franchise tax is
and attach to the D-2030P Payment Voucher, using the applicable
incorrect.
mailing address.
How do you fi le this form?
Make the check or money order payable to the DC Treasurer.
Attach it to your return if you complete the form before fi ling your tax
return. If you complete the D-2220 after fi ling and receiving a notice of
penalty assessment, send it to:
Offi ce of Tax and Revenue
1101 4th St SW, 2nd Floor
Washington DC 20024
D-2220 page 2
Revised 08/13
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