Form 2220 – Fill Out and Use This PDF

The Form 2220, officially known as "Underpayment of Estimated Tax by Corporations," is a document prepared by the Internal Revenue Service (IRS) for corporations to calculate penalties related to underpayment of estimated taxes. Specifically, it helps businesses determine if they've paid enough in estimated taxes throughout the year, accounting for nuances like seasonal income variations or changes in tax laws. Despite the fact that the IRS can calculate this penalty and bill the corporation directly, Form 2220 allows corporations to proactively calculate and include this penalty on their income tax return. Ready to ensure your corporate taxes are on point? Click the button below to start filling out your Form 2220.

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Form 2220 PDF Details

Navigating tax obligations can be intricate for corporations, and this is where Form 2220, officially known as "Underpayment of Estimated Tax by Corporations," steps in as a critical tool. Managed by the Department of the Treasury and overseen by the Internal Revenue Service (IRS), this form helps corporations determine if they have paid less estimated tax than required. The form attaches directly to the corporation's tax return, streamlining the process of identifying and rectifying underpayments. Not every corporation is mandated to file Form 2220 because the IRS automatically calculates any owed penalties and informs the corporation. However, if a corporation opts to calculate the penalty itself, the resulting figure must be reported on the corporation’s income tax return, with Form 2220 serving as the calculation worksheet but not as part of the return submission. The form intricately guides corporations through the required annual payment calculation, factoring in various elements such as personal holding company tax, look-back interest for certain contracts or depreciation, and credits for federal tax paid on fuels. Further sections dive into the specifics of figuring the underpayment and applicable penalties, utilizing installment methods tailored to the corporation's income patterns throughout the fiscal year. By checking specific boxes, a corporation can assert its need to file the form based on the adjusted seasonal installment method, the annualized income installment method, or a classification as a "large corporation" for its first required installment. Calculating penalties also involves considering the number of days from the due date of an installment to an actual payment or predetermined date, enabling precise penalty assessments based on the period of underpayment.

Question	Answer
Form Name	Form 2220
Form Length	4 pages
Fillable?	No
Fillable fields	0
Avg. time to fill out	1 min
Other names	Instructions for Form 2220 (2020)Internal Revenue Service2020 Instructions for Form 2220 - IRS tax formsInstructions for Form 2220 (2020)Internal Revenue Service

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Form 2220	Underpayment of Estimated Tax by Corporations		OMB No. 1545-0123
			OMB No. 1545-0123

Department of the Treasury	▶ Attach to the corporation’s tax return.		2021
Internal Revenue Service	▶ Go to www.irs.gov/Form2220 for instructions and the latest information.
Name		Employer identification number

Note: Generally, the corporation is not required to file Form 2220 (see Part II below for exceptions) because the IRS will figure any penalty owed and bill the corporation. However, the corporation may still use Form 2220 to figure the penalty. If so, enter the amount from page 2, line 38, on the estimated tax penalty line of the corporation’s income tax return, but do not attach Form 2220.

Part I Required Annual Payment

1	Total tax (see instructions)	. . . . . . .	1
2a	Personal holding company tax (Schedule PH (Form 1120), line 26) included on line 1	2a
b Look-back interest included on line 1 under section 460(b)(2) for completed long-term
	contracts or section 167(g) for depreciation under the income forecast method . .	2b
c	Credit for federal tax paid on fuels (see instructions)	2c
d	Total. Add lines 2a through 2c	. . . . . . .	2d
3	Subtract line 2d from line 1. If the result is less than $500, do not complete or file this form. The corporation
	does not owe the penalty	. . . . . . .	3
4	Enter the tax shown on the corporation’s 2020 income tax return. See instructions. Caution: If the tax is zero or
	the tax year was for less than 12 months, skip this line and enter the amount from line 3 on line 5 . . . .		4
5	Required annual payment. Enter the smaller of line 3 or line 4. If the corporation is required to skip line 4, enter
	the amount from line 3	. . . . . . .	5

Part II Reasons for Filing—Check the boxes below that apply. If any boxes are checked, the corporation must file Form 2220 even if it does not owe a penalty. See instructions.

The corporation is using the adjusted seasonal installment method. The corporation is using the annualized income installment method.

The corporation is a “large corporation” figuring its first required installment based on the prior year’s tax.

Part III Figuring the Underpayment

				(a)	(b)	(c)		(d)
9	Installment due dates. Enter in columns (a) through (d) the 15th day
9
	of the 4th (Form 990-PF filers: Use 5th month), 6th, 9th, and 12th
	months of the corporation’s tax year		9
			9
10	Required installments. If the box on line 6 and/or line 7 above is
	checked, enter the amounts from Schedule A, line 38. If the box on
	line 8 (but not 6 or 7) is checked, see instructions for the amounts to
	enter. If none of these boxes are checked, enter 25% (0.25) of line 5
	above in each column	.	10
11	Estimated tax paid or credited for each period. For column (a) only,
	enter the amount from line 11 on line 15. See instructions . . .	.	11
	Complete lines 12 through 18 of one column before going to the
	next column.
12	Enter amount, if any, from line 18 of the preceding column . . .	.	12
13	Add lines 11 and 12	.	13
14	Add amounts on lines 16 and 17 of the preceding column . . .	.	14
15	Subtract line 14 from line 13. If zero or less, enter -0- . . . .	.	15
16	If the amount on line 15 is zero, subtract line 13 from line 14.
	Otherwise, enter -0-	.	16
17	Underpayment. If line 15 is less than or equal to line 10, subtract	line
	15 from line 10. Then go to line 12 of the next column. Otherwise, go
	to line 18	.	17
18	Overpayment. If line 10 is less than line 15, subtract line 10 from line
	15. Then go to line 12 of the next column	.	18
Go to Part IV on page 2 to figure the penalty. Do not go to Part IV if there are no entries on line 17—no penalty is owed.
For Paperwork Reduction Act Notice, see separate instructions.				Cat. No. 11746L			Form 2220 (2021)

Form 2220 (2021)									Page 2

Part IV		Figuring the Penalty
						(a)	(b)	(c)	(d)
19	Enter the date of payment or the 15th day of the 4th month after
19
	the close of the tax year, whichever is earlier. (C corporations with
	tax years ending June 30 and S corporations: Use 3rd month
	instead of 4th month. Form 990-PF and Form 990-T filers: Use 5th
	month instead of 4th month.) See instructions				19
					19
20	Number of days from due date of installment on line 9 to the date
	shown on line 19				20
21	Number of days on line 20 after 4/15/2021 and before 7/1/2021				21
			Number of days on line 21
22	Underpayment on line 17 ×		365	× 3% (0.03)	22	$	$	$	$
23	Number of days on line 20 after 6/30/2021 and before 10/1/2021				23
			Number of days on line 23
24	Underpayment on line 17 ×		365	× 3% (0.03)	24	$	$	$	$
25	Number of days on line 20 after 9/30/2021 and before 1/1/2022				25
			Number of days on line 25
26	Underpayment on line 17 ×		365	× 3% (0.03)	26	$	$	$	$
27	Number of days on line 20 after 12/31/2021 and before 4/1/2022				27
			Number of days on line 27
28	Underpayment on line 17 ×		365	× 3% (0.03)	28	$	$	$	$
29	Number of days on line 20 after 3/31/2022 and before 7/1/2022				29
			Number of days on line 29
30	Underpayment on line 17 ×		365	× *%	30	$	$	$	$
31	Number of days on line 20 after 6/30/2022 and before 10/1/2022				31
			Number of days on line 31
32	Underpayment on line 17 ×		365	× *%	32	$	$	$	$
33	Number of days on line 20 after 9/30/2022 and before 1/1/2023				33
			Number of days on line 33
34	Underpayment on line 17 ×		365	× *%	34	$	$	$	$
35	Number of days on line 20 after 12/31/2022 and before 3/16/2023				35
			Number of days on line 35
36	Underpayment on line 17 ×		365	× *%	36	$	$	$	$
37	Add lines 22, 24, 26, 28, 30, 32, 34, and 36				37	$	$	$	$

38Penalty. Add columns (a) through (d) of line 37. Enter the total here and on Form 1120, line 34; or the comparable

line for other income tax returns

*Use the penalty interest rate for each calendar quarter, which the IRS will determine during the first month in the preceding quarter. These rates are published quarterly in an IRS News Release and in a revenue ruling in the Internal Revenue Bulletin. To obtain this information on the Internet, access the IRS website at www.irs.gov. You can also call 1-800-829-4933 to get interest rate information.

Form 2220 (2021)

Form 2220 (2021)	Page 3

Schedule A	Adjusted Seasonal Installment Method and Annualized Income Installment Method
	See instructions.

Form 1120-S filers: For lines 1, 2, 3, and 21, “taxable income” refers to excess net passive income or the amount on which tax is imposed under section 1374(a), whichever applies.

Part I Adjusted Seasonal Installment Method

Caution: Use this method only if the base period percentage for any 6 consecutive months is at least 70%. See instructions.

1Enter taxable income for the following periods.

a	Tax year beginning in 2018
b	Tax year beginning in 2019
c	Tax year beginning in 2020

2Enter taxable income for each period for the tax year beginning in 2021. See the instructions for the treatment of extraordinary items

3Enter taxable income for the following periods.

a	Tax year beginning in 2018
b	Tax year beginning in 2019
c	Tax year beginning in 2020

4Divide the amount in each column on line 1a by the amount in

column (d) on line 3a . . . . . . . . . . . . .

5Divide the amount in each column on line 1b by the amount in

column (d) on line 3b . . . . . . . . . . . . .

6Divide the amount in each column on line 1c by the amount in

column (d) on line 3c . . . . . . . . . . . . .

7	Add lines 4 through 6
8	Divide line 7 by 3.0
9a	Divide line 2 by line 8
b	Extraordinary items (see instructions)
c	Add lines 9a and 9b

10Figure the tax on the amount on line 9c using the instructions for Form 1120, Schedule J, line 2, or comparable line of

corporation’s return . . . . . . . . . . . . . .

11a Divide the amount in columns (a) through (c) on line 3a by the amount in column (d) on line 3a . . . . . . . . . .

bDivide the amount in columns (a) through (c) on line 3b by the

amount in column (d) on line 3b . . . . . . . . . .

cDivide the amount in columns (a) through (c) on line 3c by the

	amount in column (d) on line 3c
12	Add lines 11a through 11c
13	Divide line 12 by 3.0

14Multiply the amount in columns (a) through (c) of line 10 by

columns (a) through (c) of line 13. In column (d), enter the amount from line 10, column (d) . . . . . . . . . .

15Enter any alternative minimum tax (trusts only) for each payment

period. See instructions

. . . . . . . . . . . .

16Enter any other taxes for each payment period. See instructions

17	Add lines 14 through 16

18For each period, enter the same type of credits as allowed on

Form 2220, lines 1 and 2c. See instructions . . . . . .

19Total tax after credits. Subtract line 18 from line 17. If zero or less, enter -0- . . . . . . . . . . . . . . . .

	(a)	(b)	(c)	(d)

	First 3 months	First 5 months	First 8 months	First 11 months
1a
1a
1b
1c
2
	First 4 months	First 6 months	First 9 months	Entire year
3a
3a
3b
3c
4
5
6
7
8
9a
9b
9c
10
11a
11b
11c
12
13
14
15
16
17
18
19

Form 2220 (2021)

Form 2220 (2021)		Page 4

Part II	Annualized Income Installment Method

20Annualization periods (see instructions) . . . . . . . .

21Enter taxable income for each annualization period. See instructions for the treatment of extraordinary items . . . .

22	Annualization amounts (see instructions)
23a	Annualized taxable income. Multiply line 21 by line 22 . . .
b	Extraordinary items (see instructions)
c	Add lines 23a and 23b

24Figure the tax on the amount on line 23c using the instructions for Form 1120, Schedule J, line 2, or comparable line of

corporation’s return . . . . . . . . . . . . . .

25Enter any alternative minimum tax (trusts only) for each payment

period (see instructions)

. . . . . . . . . . . .

26Enter any other taxes for each payment period. See instructions

27	Total tax. Add lines 24 through 26

28For each period, enter the same type of credits as allowed on

Form 2220, lines 1 and 2c. See instructions . . . . . .

29Total tax after credits. Subtract line 28 from line 27. If zero or

less, enter -0- . . . . . . . . . . . . . . . .

30	Applicable percentage
31	Multiply line 29 by line 30

	(a)	(b)	(c)	(d)

	First	First	First	First

20	months	months	months	months
21
22
23a
23b
23c
24
25
26
27
28
29
30	25%	50%	75%	100%
31

Part III Required Installments

Note: Complete lines 32 through 38 of one column before completing the next column.

32If only Part I or Part II is completed, enter the amount in each column from line 19 or line 31. If both parts are completed, enter the smaller of the amounts in each column from line 19 or line 31

33Add the amounts in all preceding columns of line 38. See

	instructions
34	Adjusted seasonal or annualized income installments.
	Subtract line 33 from line 32. If zero or less, enter -0- . . .

35Enter 25% (0.25) of line 5 on page 1 of Form 2220 in each

column. Note: “Large corporations,” see the instructions for line 10 for the amounts to enter . . . . . . . . . . .

36Subtract line 38 of the preceding column from line 37 of the

	preceding column
37	Add lines 35 and 36
38	Required installments. Enter the smaller of line 34 or line 37
	here and on page 1 of Form 2220, line 10. See instructions .

1st	2nd	3rd	4th
installment	installment	installment	installment

Form 2220 (2021)

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2. Once the last array of fields is completed, you need to add the needed details in Installment due dates Enter in, Required installments If the box, Estimated tax paid or credited for, Complete lines through of one, Enter amount if any from line of, If the amount on line is zero, Underpayment If line is less than, Overpayment If line is less than, Then go to line of the next, Go to Part IV on page to figure, For Paperwork Reduction Act Notice, Cat No L, and Form so you're able to go to the 3rd part.

Guidelines on how to fill in Form 2220 part 2

3. This next part will be focused on Part IV Figuring the Penalty, Enter the date of payment or the, Number of days from due date of, Number of days on line after and, Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, and Number of days on line - complete these empty form fields.

Learn how to complete Form 2220 portion 3

4. Completing Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, Number of days on line, Number of days on line after and, Underpayment on line, Number of days on line, Add lines and, Penalty Add columns a through d of, and Use the penalty interest rate for is crucial in this next section - don't forget to don't hurry and fill in every single blank!

Number of days on line, Number of days on line after and, and Underpayment on line in Form 2220

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