PDF document

- 1 -

Userid: CPM Schema: instrx Leadpct: 100% Pt. size: 9 Draft Ok to Print
AH XSL/XML Fileid: … orm-8804-w/2025/a/xml/cycle06/source (Init. & Date) _______

Page 1 of 5 15:26 - 18-Nov-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2025

Instructions for Form 8804-W

(WORKSHEET)

Installment Payments of Section 1446 Tax for Partnerships

Section references are to the Internal Revenue Code unless
otherwise noted. Refiguring Estimated Section 1446
Tax
Future Developments If, after the partnership figures and makes an installment
For the latest information about developments related to Form payment of estimated section 1446 tax, it finds that its section
8804-W and its instructions, such as legislation enacted after 1446 tax liability for the year will be more or less than originally
they were published, go to IRS.gov/Form8804W. estimated, it may have to refigure its required installments. If
earlier installments were underpaid, the partnership may owe a
penalty for underpayment of estimated tax. An immediate
General Instructions catch-up payment should be made to reduce the amount of any
penalty resulting from the underpayment of any earlier
Purpose of Form installments, whether caused by a change in estimate, failure to
Partnerships that have effectively connected taxable income make a payment, or a mistake.
(ECTI) allocable to foreign partners can use the Form 8804-W
(WORKSHEET) to determine the proper estimated section 1446
tax payments. Specific Instructions

Who Must Make Estimated Section Part I—Determination of Installment
1446 Tax Payments Payments
Partnerships must generally make installment payments of Complete Form 8804-W for each installment payment of section
estimated section 1446 tax if the aggregate tax on the ECTI that 1446 tax based on the information available at the time of the
is allocable to all foreign partners will be $500 or more. installment payment.

When To Make Estimated Section Lines 1 Through 6—Current Year Safe Harbor
1446 Tax Payments Lines 1a, 1e, 1i, 1m, and 1q. To determine the allocable share
The installments are due by the 15th day of the 4th, 6th, 9th, and of ECTI for all foreign partners, see Effectively Connected
12th months of the partnership's tax year. If any date falls on a Taxable Income in the Instructions for Forms 8804, 8805, and
Saturday, Sunday, or legal holiday, the installment is due on the 8813. Enter on lines 1i, 1m, and 1q the specified types of ECTI
next regular business day. allocable to those partners who would be entitled to use a
preferential rate on such income or gain (see Regulations
Underpayment of Estimated Section section 1.1446-3(a)(2)). For tiered partnerships, see Regulations
section 1.1446-5.
1446 Tax
A partner may be entitled to use a preferential rate on the
A partnership that doesn’t make estimated section 1446 tax
following types of income or gain.
payments when due may be subject to an underpayment penalty
for the period of underpayment. See Schedule A (Form 8804) for 1. Line 1i—See section 1(h)(4) and the instructions for
details. Schedule D (Form 1040), line 18, for more information regarding
28% rate gain.
How To Make Estimated Section 1446 2. Line 1m—See section 1(h)(6) and the instructions for
Schedule D (Form 1040), line 19, for more information regarding
Tax Payments unrecaptured section 1250 gain.
A partnership that is required to make an installment payment of
section 1446 tax may submit payment by filing Form 8813 or 3. Line 1q—Adjusted net capital gain is net capital gain, as
transmit payment through the Electronic Federal Tax Payment defined in section 1222(11), reduced (but not below zero) by the
System (EFTPS). If using EFTPS, Forms 8804, 8805, or 8813, sum of (a) unrecaptured section 1250 gain, and (b) 28% rate
must still be filed. For more information on EFTPS, go to gain, plus qualified dividend income. See section 1(h)(3).
EFTPS.gov. If the partnership has net ordinary loss, net short-term capital
Furthermore, the partnership is generally required to notify loss, or net 28% rate loss, each net loss should be netted
each foreign partner of the section 1446 tax paid on the partner's against the appropriate categories of income and gain to
behalf within 10 days of the installment payment due date, or, if determine the amounts of income and gain to be entered on
paid later, the date the installment payment is made. See lines 1a, 1e, 1i, 1m, and 1q, respectively. Don’t enter a negative
Regulations section 1.1446-3(d)(1)(i) for information that must number on line 1a, 1e, 1i, 1m, or 1q. See section 1(h) and Notice
be included in the notification and for exceptions to the 97-59, 1997-45 I.R.B. 7, available at IRS.gov/pub/irs-irbs/
notification requirement. irb97-45.pdf, for rules for netting gains and losses.

Instructions for Form 8804W (2025) Catalog Number 51675X
Nov 18, 2024 Department of the Treasury Internal Revenue Service www.irs.gov

- 2 -

Enlarge image

Page 2 of 5 Fileid: … orm-8804-w/2025/a/xml/cycle06/source 15:26 - 18-Nov-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Lines 1b, 1f, 1j, 1n, and 1r. Enter the reduction amounts for year safe harbor, plus (b) the sum of the amount by which the
state and local taxes under Regulations section 1.1446-6(c)(1) current year safe harbor exceeds the prior year safe harbor
(iii). See Reductions for State and Local Taxes in the Instructions amount paid in for each prior installment period during which it
for Forms 8804, 8805, and 8813 for additional information. The qualified for the prior year safe harbor.
netting rules under section 1(h) and Notice 97-59 must be
considered in determining the category of income the reduction Line 9
amounts offset. You can enter the smaller of line 7 or line 8. However, if, for any
installment payment, line 7 is smaller than line 8 and you enter
Lines 1c, 1g, 1k, 1o, and 1s. Enter the reduction amounts that smaller line 7 amount on line 9, you won’t qualify for the prior
resulting from certified partner-level items received from foreign year safe harbor when determining any penalty due on
partners using Form 8804-C. See Certification of Deductions Schedule A (Form 8804) (see the line 8 instructions, earlier).
and Losses in the Instructions for Forms 8804, 8805, and 8813 Therefore, in that case, for any subsequent installment payment
for additional information. The netting rules under section 1(h) during the tax year, don’t use the line 8 amount.
and Notice 97-59 must be considered in determining the
category of income the reduction amounts offset. Line 10—Installment Due Dates
Line 8—Prior Year Safe Harbor Calendar-year taxpayers. Enter 4-15-2025, 6-16-2025,
Enter the total section 1446 tax that would have been due for 9-15-2025, and 12-15-2025, respectively, in columns (a) through
2024, applying the 2024 rates (see the 2024 Form 8804-W for (d).
the 2024 rates), on ECTI allocable to all foreign partners for Fiscal-year taxpayers. Enter the 15th day of the 4th, 6th, 9th,
2024, without any reductions for state and local taxes under and 12th months of the partnership's tax year in columns (a)
Regulations section 1.1446-6(c)(1)(iii) or certified partner-level through (d). If the regular due date falls on a Saturday, Sunday,
items. For the partnership's first installment payment, if the 2024 or legal holiday, enter the next business day.
Form 8804 hasn’t yet been filed, an estimate is acceptable.
However, if the partnership later determines that this estimate is Line 11
incorrect, see Refiguring Estimated Section 1446 Tax, earlier.
Enter 25% (0.25) of line 9 in columns (a) through (d). If the
Complete line 8 only if all of the following apply. partnership uses the annualized income installment method or
the adjusted seasonal installment method, then enter the
• The prior tax year consisted of 12 months. amount from line 43.
• The partnership timely files (including extensions) a U.S.
return of partnership income (for example, Form 1065) for the Annualized income installment method and/or adjusted
prior year. seasonal installment method. If the partnership's ECTI is
• The amount of ECTI for the prior tax year is not less than 50% expected to vary during the year because, for example, it
of the ECTI expected for the current tax year. Furthermore, the operates its business on a seasonal basis, it may be able to
Form 8804 on which the current year ECTI will be reported must lower the amount of one or more required installments by using
be timely filed. the annualized income installment method and/or the adjusted
seasonal installment method. For example, a ski shop, which
If any of the above does not apply, skip line 8 and enter the receives most of its income during the winter months, may be
amount from line 7 on line 9. able to benefit from using one or both of these methods in
If the partnership qualifies to use the prior year safe harbor figuring one or more of its required installments.
and chooses that method, it must use that method to pay each of To use one or both of these methods, complete Part II and/or
its installments during the tax year. Furthermore, for each Part III of the form. If those Parts are used for any payment date,
installment payment, the average of that installment and prior those Parts must be used for all subsequent payment due dates.
installments during the tax year must be at least 25% of the To arrive at the amount of each required installment, Part IV
amount that satisfies the partnership's section 1446 tax liability automatically selects the smallest of (a) the annualized income
under the prior year safe harbor. If the partnership doesn’t satisfy installment (if applicable), (b) the adjusted seasonal installment
both of these requirements, it won’t qualify for the prior year safe (if applicable), or (c) the current year safe harbor (increased by
harbor when determining any penalty due on Schedule A (Form any recapture of a reduction in a required installment under
8804). section 6655(e)(1)(B)).
If the partnership begins using the prior year safe harbor
method and it determines later in the tax year (based upon the Line 12
standard option annualization method, described later in these Include on line 12 any 2024 overpayment that the partnership
instructions) that it won’t meet the 50% of ECTI requirement chose to credit against its 2025 tax. The overpayment is credited
described in the last bulleted item above, it can make all against unpaid required installments in the order in which the
subsequent installment payments using the standard option installments are required to be paid.
annualization method and it won’t be subject to the penalty
determined on Schedule A (Form 8804). This change in method Also, include on line 12 the following.
must be disclosed in a statement attached to the Form 8804 filed
by the partnership for the current tax year. The statement must • Section 1446 tax withheld and paid by another partnership
include enough information to allow the IRS to determine because the partnership preparing this Form 8804-W was a
whether the change was appropriate. partner in that partnership during the tax year. See the
instructions for Form 8804, line 6b and line 6c, in the Instructions
If the partnership begins using the prior year safe harbor for Forms 8804, 8805, and 8813.
method and switches to the current year safe harbor (because • Section 1445(a) or 1445(e)(1) tax withheld from or paid by the
the partnership doesn’t qualify for the relief described in the partnership filing this Form 8804-W during the tax year for a
previous paragraph (that is, using the standard option disposition of a U.S. real property interest. See the instructions
annualization method) or the partnership chooses not to for Form 8804, line 6d and line 6e, in the Instructions for Forms
continue using it), in order to avoid an underpayment penalty on 8804, 8805, and 8813.
the current installment payment, the partnership must pay the • Section 1446(f)(1) tax withheld from the partnership filing this
sum of (a) the current installment payment based on the current Form 8804-W during the tax year for a disposition of an interest

2 Instructions for Form 8804-W (2025)

- 3 -

Enlarge image

Page 3 of 5 Fileid: … orm-8804-w/2025/a/xml/cycle06/source 15:26 - 18-Nov-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

in a partnership engaged in the conduct of a U.S. trade or and 22 through 25 to show the amounts allocable to both types
business. See the instructions for Form 8804, lines 6f and 6g, in of partners.
the Instructions for Forms 8804, 8805, and 8813.
Complete this part only if the partnership's base period
The partnership generally enters these amounts in the percentage for any 6 consecutive months of the tax year equals
column that corresponds to the installment period for which or exceeds 70%. Figure the base period percentage using the
these amounts were paid or withheld. However, if the partnership 6-month period in which the partnership normally receives the
learns about the payments or withholding in a subsequent largest part of its ECTI. The base period percentage for any
installment period, the partnership can claim them in that period. period of 6 consecutive months is the average of the three
percentages figured by dividing the ECTI for the corresponding
Parts II Through IV 6-consecutive-month period in each of the 3 preceding tax years
If only the adjusted seasonal installment method (Part II) is used, by the ECTI for each of their respective tax years.
complete Parts II and IV. If only the annualized income Example. An amusement park with a calendar year as its tax
installment method (Part III) is used, complete Parts III and IV. If year receives the largest part of its ECTI during a 6-month
both methods are used, complete all three Parts. Enter in each period, May through October. To figure its base period
column on line 11 the amounts from the corresponding column percentage for this 6-month period, the amusement park figures
of line 43. its ECTI for each May–October period in 2022, 2023, and 2024.
It then divides the ECTI for each May–October period by the total
Don’t figure any required installment until after the end of ECTI for that particular tax year. The resulting percentages are
! the month preceding the due date for that installment. 69% (0.69) for May–October 2022, 74% (0.74) for May–October
CAUTION
2023, and 67% (0.67) for May–October 2024. Because the
Extraordinary items. Generally, under the annualized income average of 69% (0.69), 74% (0.74), and 67% (0.67) is 70%
installment method, extraordinary items must be taken into (0.70), the base period percentage for May–October 2025 is
account after annualizing the ECTI for the annualization period. 70% (0.70). Therefore, the amusement park qualifies for the
Similar rules apply in determining ECTI under the adjusted adjusted seasonal installment method.
seasonal installment method. An extraordinary item includes:
• Any item identified in Regulations section 1.1502-76(b)(2)(ii) Line 15
(C)(1), (2), (3), (4), (7), and (8); If the partnership has certain extraordinary items, special rules
• A section 481(a) adjustment; and apply. Don’t include on line 15 the de minimis extraordinary items
• Net gain or loss from the disposition of 25% or more of the fair that the partnership chooses to include on line 22b. See
market value of the partnership's business assets during the tax Extraordinary items, earlier.
year.
These extraordinary items must be accounted for in the Line 22b
appropriate annualization period. However, a section 481(a) If the partnership has certain extraordinary items of $1 million or
adjustment (unless the partnership makes the alternative choice more from a transaction, or a section 481(a) adjustment, special
under Regulations section 1.6655-2(f)(3)(ii)(C)) is treated as an rules apply. Include these amounts on line 22b for the
extraordinary item occurring on the first day of the tax year in appropriate period. Also, include on line 22b the de minimis
which the item is taken into account in determining ECTI. extraordinary items that the partnership chooses to exclude from
For more information regarding extraordinary items, see line 15. See Extraordinary items, earlier.
Regulations section 1.6655-2(f)(3)(ii) and the examples in
Regulations section 1.6655-2(f)(3)(vii). Also, see Regulations Line 23
section 1.6655-3(d)(3). Enter the reduction to the line 22c amount for state and local
taxes under Regulations section 1.1446-6(c)(1)(iii) and for
De minimis rule. Extraordinary items identified above resulting certified foreign partner-level items submitted under Regulations
from a particular transaction that total less than $1 million (other section 1.1446-6. See Certification of Deductions and Losses in
than a section 481(a) adjustment) can be annualized using the the Instructions for Forms 8804, 8805, and 8813 for additional
general rules of Regulations section 1.6655-2(f), or, if the information.
partnership chooses, can be taken into account after annualizing
the ECTI for the annualization period. Part III—Annualized Income
Part II—Adjusted Seasonal Installment Method

Installment Method Line 30—Annualization Periods
Note. Part II doesn’t reflect the lower preferential rates permitted Enter in the space on line 30, columns (a) through (d),
under Regulations section 1.1446-3(a)(2). These were omitted respectively, the annualization periods that the partnership is
because, for most taxpayers, the income reported in Part II will using, based on the options listed below. For example, if the
be predominantly (or exclusively) ordinary income. If the partnership elects Option 1, enter on line 30 the annualization
partnership wishes to consider lower preferential rates for Part II periods 2, 4, 7, and 10, in columns (a) through (d), respectively.
(and if the requirements outlined in the Note in the line 31 Use Option 1 or Option 2 only if the partnership elected
instructions are met), it should prepare a statement that ! to use one of these options by filing Form 8842, Election
appropriately expands lines 15 and 22 through 25 to show the CAUTION To Use Different Annualization Periods for Corporate
applicable special types of income or gain and the applicable Estimated Tax, on or before the due date of the first required
percentages (see, for example, lines 33 and 34 of this Form installment payment. Once made, the election is irrevocable for
8804-W). Also, Part II, lines 15 and 22 through 25, don’t provide the particular tax year.
the separate entries for corporate and non-corporate partners
necessary to apply the rates on lines 25a and 25b. A partnership
with corporate and non-corporate partners completing Part II
should prepare a statement that appropriately expands lines 15

Instructions for Form 8804-W (2025) 3

- 4 -

Enlarge image

Page 4 of 5 Fileid: … orm-8804-w/2025/a/xml/cycle06/source 15:26 - 18-Nov-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

1st 2nd 3rd 4th Lines 33a, 33e, 33i, 33m, and 33q
Install- Install- Install- Install-
ment ment ment ment If the partnership has certain extraordinary items that total $1
million or more from a particular transaction, or a section 481(a)
Standard adjustment, special rules apply. Include these amounts on
Option 3 3 6 9
line 33a, 33e, 33i, 33m, or 33q, depending upon the type of
Option 1 2 4 7 10 income against which the item applies, for the appropriate
Option 2 3 5 8 11 period. Also, include on line 33a, 33e, 33i, 33m, or 33q the de
minimis extraordinary items that the partnership chooses to
exclude from line 31a, 31b, 31c, 31d, or 31e, respectively. See
Extraordinary items, earlier.
Line 31—ECTI Allocable to All Foreign Partners Enter on lines 33i, 33m, and 33q the specified types of ECTI if
Enter on lines 31a through 31e the ECTI allocable to all foreign the partner would be entitled to use a preferential rate on the
partners for the months entered for each annualization period in income or gain (see Regulations section 1.1446-3(a)(2)).
columns (a) through (d) on line 30. To determine the allocable 1. Line 33i—See section 1(h)(4) and the instructions for
share of ECTI for all foreign partners, see Effectively Connected Schedule D (Form 1040), line 18, for more information regarding
Taxable Income in the Instructions for Forms 8804, 8805, and 28% rate gain.
8813. 2. Line 33m—See section 1(h)(6) and the instructions for
If the partnership has certain extraordinary items, special Schedule D (Form 1040), line 19, for more information regarding
rules apply. Don’t include on line 31a, 31b, 31c, 31d, or 31e the unrecaptured section 1250 gain.
de minimis extraordinary items that the partnership chooses to 3. Line 33q—Adjusted net capital gain is net capital gain, as
include on line 33a, 33e, 33i, 33m, or 33q, respectively. See defined in section 1222(11), reduced (but not below zero) by the
Extraordinary items, earlier. sum of (a) unrecaptured section 1250 gain, and (b) 28% rate
Note. Enter on lines 31c through 31e the specified types of gain, plus qualified dividend income. See section 1(h)(3).
ECTI (a) allocable to those partners who would be entitled to use
a preferential rate on such income or gain (see Regulations Lines 33b, 33f, 33j, 33n, and 33r
section 1.1446-3(a)(2)), and (b) for whom the partnership has Enter the reduction amounts for state and local taxes under
sufficient documentation to meet the requirements of Regulations section 1.1446-6(c)(1)(iii). See Reductions for State
Regulations section 1.1446-3(a)(2)(ii). and Local Taxes in the Instructions for Forms 8804, 8805, and
A partner may be entitled to use a preferential rate on the 8813 for additional information. The netting rules under section
following types of income or gain. 1(h) and Notice 97-59 must be considered in determining the
category of income the reduction amounts offset.
1. Line 31c—See section 1(h)(4) and the instructions for
Schedule D (Form 1040), line 18, for more information regarding
Lines 33c, 33g, 33k, 33o, and 33s
28% rate gain.
Enter the reduction amounts resulting from certified partner-level
2. Line 31d—See section 1(h)(6) and the instructions for items received from foreign partners using Form 8804-C. See
Schedule D (Form 1040), line 19, for more information regarding Certification of Deductions and Losses in the Instructions for
unrecaptured section 1250 gain. Forms 8804, 8805, and 8813 for additional information. The
3. Line 31e—Adjusted net capital gain is net capital gain, as netting rules under section 1(h) and Notice 97-59 must be
defined in section 1222(11), reduced (but not below zero) by the considered in determining the category of income the reduction
sum of (a) unrecaptured section 1250 gain, and (b) 28% rate amounts offset.
gain, plus qualified dividend income. See section 1(h)(3).
If the partnership has net ordinary loss, net short-term capital Part IV—Required Installments Under
loss, or net 28% rate loss, each net loss should be netted Part II and/or Part III
against the appropriate categories of income and gain to
determine the amounts of income and gain to be entered on Line 38
lines 31a through 31e, respectively. Don’t enter a negative
number on lines 31a through 31e. See section 1(h) and Notice Before completing line 38 in columns (b) through (d), complete
97-59 for rules for netting gains and losses. lines 39 through 43 in each of the preceding columns. For
example, complete lines 39 through 43 in column (a) before
Line 32—Annualization Amounts completing line 38 in column (b).

Enter the annualization amounts for the option used on line 30. Line 43—Required Installments
For example, if the partnership elects Option 1, enter on line 32
the annualization amounts 6, 3, 1.71429, and 1.2 in columns (a) For each installment, enter the smaller of line 39 or line 42 on
through (d), respectively. line 43. Also, enter the result on line 11.

1st 2nd 3rd 4th
Install- Install- Install- Install-
ment ment ment ment
Standard
Option 4 4 2 1.33333
Option 1 6 3 1.71429 1.2
Option 2 4 2.4 1.5 1.09091

4 Instructions for Form 8804-W (2025)

- 5 -

Enlarge image

Page 5 of 5 Fileid: … orm-8804-w/2025/a/xml/cycle06/source 15:26 - 18-Nov-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Paperwork Reduction Act Notice. Your use of this form is optional. It is provided to aid the partnership in determining its tax liability.
You aren’t required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,
as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for business
taxpayers filing this form is approved under OMB control number 1545-0123.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we’d be happy
to hear from you. You can send us comments from IRS.gov/FormComments. Or you can write to the Internal Revenue Service, Tax
Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Don’t send the tax form to this office.
Instead, keep the form for your records.

Instructions for Form 8804-W (2025) 5

PDF file checksum: 869364419

(Plugin #1/10.13/13.0)