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                                                                                               Department of the Treasury
                                                                                               Internal Revenue Service
2022

Instructions for Form 2220

Underpayment of Estimated Tax by Corporations

Section references are to the Internal Revenue Code unless        earlier due date even if it paid enough tax later to make up 
otherwise noted.                                                  the underpayment. This is true even if the corporation is due 
                                                                  a refund when its return is filed. However, the corporation 
Future Developments                                               may be able to reduce or eliminate the penalty by using the 
                                                                  annualized income installment method or the adjusted 
For the latest information about developments affecting Form      seasonal installment method. See the instructions for Part II 
2220 and its instructions, such as legislation enacted after      for details.
they were published, go to IRS.gov/Form2220.
                                                                  Exception to the Penalty
                                                                  A corporation will not have to pay a penalty if the tax shown 
General Instructions                                              on the corporation's 2022 return (the Form 2220, Part I, 
                                                                  line 3, amount) is less than $500.
Purpose of Form
Corporations (including S corporations), tax-exempt               How To Use Form 2220
organizations subject to the unrelated business income tax,       • Complete Part I, lines 1 through 3. If line 3 is $500 or more, 
and private foundations use Form 2220 to determine:               complete the rest of Part I to determine the required annual 
• Whether they are subject to the penalty for underpayment        payment. Then, go to Part II.
of estimated tax and, if so,                                      • Check one or more boxes in Part II if the corporation uses 
• The amount of the underpayment penalty for the period           the adjusted seasonal installment method, the annualized 
that applies.                                                     income installment method, or if the corporation is a large 
                                                                  corporation.
Who Must File
Generally, the corporation does not have to file this form with     If the corporation checked a box in Part II, attach Form 
its income tax return because the IRS will figure the amount      2220 to the income tax return. Be sure to check the box on 
of any penalty and notify the corporation of any amount due.      Form 1120, page 1, line 34; or the comparable line of any 
However, even if the corporation does not owe a penalty,          other income tax return the corporation is required to file (for 
complete and attach this form to the corporation's tax return if  example, Form 1120-C, 1120-L, or 1120-S).
the Part I, line 3, amount is $500 or more and any of the         • Complete Part III to determine the underpayment for any of 
following apply.                                                  the installment due dates.
                                                                  • If there is an underpayment on Part III, line 17 (column (a), 
  1. The adjusted seasonal installment method is used.            (b), (c), or (d)), go to Part IV to figure the penalty.
  2. The annualized income installment method is used.            • Complete Schedule A if the corporation uses the adjusted 
  3. The corporation is a large corporation (as defined in        seasonal installment method and/or the annualized income 
the instructions for Part II, line 8) figuring its first required installment method.
installment based on the prior year's tax.
Who Must Pay the Underpayment                                     Specific Instructions

Penalty                                                           Part I. Required Annual Payment
Generally, a corporation is subject to the penalty if it did not  Complete lines 1 through 5 to figure the corporation's 
timely pay at least the smaller of:                               required annual payment.
  1. The tax shown on its 2022 return, or                         Line 1.   Generally, enter the tax from Form 1120, line 31; or 
  2. The tax shown on its 2021 return (if it filed a 2021         the applicable line for other income tax returns. However, if 
return showing at least some amount of tax and the return         that amount includes any tax attributable to a sale described 
was for a full 12 months). However, a large corporation can       in section 338(a)(1), do not include that tax on line 1. Instead, 
base only its first required installment on the prior year's tax. write “Sec. 338 gain” and show the amount of tax in brackets 
                                                                  on the dotted line next to line 1. This exclusion from the line 1 
  In these instructions, “return” generally refers to the         amount does not apply if a section 338(h)(10) election is 
corporation's original return. However, an amended return is      made.
considered the original return if the amended return is filed by 
the due date (including extensions) of the original return.         For information on how to figure the total tax for estimated 
Also, for purposes of determining a required installment of a     tax purposes for other entities, see the following forms or 
corporation’s estimated tax, if an amended return is filed for    their instructions.
the prior tax year, then the return for the “prior tax year” 
includes the amended return, but only if the amended return 
is filed before the applicable installment due date.
  The penalty is figured separately for each installment due 
date. Therefore, the corporation may owe a penalty for an 

Sep 29, 2022                                                 Cat. No. 64293P

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• 990-PF • 1120-FSC • 1120-REIT • If the corporation is using both methods, check the boxes
in Part II, lines 6 and 7, and complete all three parts of
• 990-T • 1120-L • 1120-RIC Schedule A.
• 1120-C • 1120-ND • 1120-S
• 1120-F • 1120-PC • 1120-SF Line 8. Large corporations. A large corporation is a
corporation (other than an S corporation) that had, or whose
predecessor had, taxable income (defined below) of $1
million or more for any of the 3 tax years immediately
preceding the 2022 tax year, or if less, the number of years
Line 2c. Enter the amount from Form 1120, Schedule J, the corporation has been in existence. See Regulations
line 20b, or the applicable line for other income tax returns. section 1.6655-4.
Line 4. All filers (other than S corporations). Figure the Taxable income, for this purpose, is modified to exclude
corporation's 2021 tax the same way the amount on line 3 of net operating loss and capital loss carrybacks and
this form was determined, using the taxes and credits from its carryovers. Members of a controlled group, as defined in
2021 tax return. However, skip line 4 and enter on line 5 the section 1563, must divide the $1 million amount among
amount from line 3 if either of the following applies. themselves under rules similar to those in section 1561. If the
• The corporation did not file a tax return for 2021 that corporation is a large corporation figuring its first required
showed a liability for at least some amount of tax. installment based on the prior year's tax, check the box on
• The corporation had a 2021 tax year of less than 12 Part II, line 8, and, if applicable, check the box(es) on Part II,
months. line 6 and/or line 7. Also, if applicable, complete Schedule A,
S corporations. Enter on line 4 the sum of: Parts I, II, and III, as discussed below in the instructions for
1. The total of the investment credit recapture tax and the line 10.
built-in gains tax shown on the return for the 2022 tax year,
and Part III. Figuring the Underpayment
2. Any excess net passive income tax shown on the S Line 9. Installment due dates. The corporation is generally
corporation's return for the 2021 tax year. required to enter the 15th day of the 4th (Form 990-PF filers,
use the 5th month), 6th, 9th, and 12th months of its tax year.
If the 2021 tax year was less than 12 months, skip line 4
and enter on line 5 the amount from line 3. Note. Multiple columns can have the same due date if the
due date has been extended by relief provided by the IRS
Part II. Reasons for Filing (for example, disaster relief).
Lines 6 and 7. Adjusted seasonal installment method Line 10. Required installments. If the box on line 6 and/or
and/or annualized income installment method. If the line 7 is checked, enter the amounts from Schedule A,
corporation's income varied during the year because, for line 38.
example, it operated its business on a seasonal basis, it may Large corporations. Large corporations, follow the
be able to lower or eliminate the amount of one or more instructions below.
required installments by using the adjusted seasonal
installment method and/or the annualized income installment 1. If the box on line 8 (but not line 6 or line 7) is checked
method. and line 3 is smaller than line 4, enter 25% of line 3 in
columns (a) through (d) of line 10.
Example. A ski shop, which receives most of its income
during the winter months, may benefit from using one or both 2. If the box on line 8 (but not line 6 or line 7) is checked
of these methods to figure its required installments. The and line 4 is smaller than line 3, enter 25% of line 4 in column
annualized income installment or adjusted seasonal (a) of line 10. In column (b), figure the amount to enter as
installment may be less than the required installment under follows:
the regular method for one or more due dates. Using one or a. Subtract line 4 from line 3,
both of these methods may reduce or eliminate the penalty b. Add the result to the amount on line 3, and
for those due dates. c. Multiply the total in item b above by 25%, and enter the
Use Schedule A (Form 2220, pages 3 and 4) to figure one result in column (b).
or more required installments. If Schedule A is used for any
payment due date, it must be used for all payment due dates. In columns (c) and (d), enter 25% of line 3.
To arrive at the amount of each required installment, 3. If the box on line 8 and the box on line 6 and/or line 7
Schedule A automatically selects the smallest of: are checked, follow the instructions in items 1 and 2 above
• The adjusted seasonal installment (if applicable), (substituting "Schedule A, line 35" for "line 10" in the
• The annualized income installment (if applicable), or calculation). Enter the amounts from Schedule A, line 38, on
• The regular installment under section 6655(d)(1) line 10.
(increased by any recapture of a reduction in a required
installment under section 6655(e)(1)(B)). Line 11. Enter the estimated tax payments made by the
Follow the steps below to determine which parts of the corporation for its tax year as indicated below. Include any
form have to be completed. overpayment from the corporation's 2021 tax return that was
• If the corporation is using only the adjusted seasonal credited to the corporation's 2022 estimated tax. If an
installment method, check the box in Part II, line 6, and installment is due on a Saturday, Sunday, or legal holiday,
complete Schedule A, Parts I and III. payments made on the next day that is not a Saturday,
• If the corporation is using only the annualized income Sunday, or legal holiday are considered made timely to the
installment method, check the box in Part II, line 7, and extent the payment is applied against that required
complete Schedule A, Parts II and III. installment.

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Column (a). Enter payments made by the date on line 9, De minimis rule. Extraordinary items identified above
column (a). that are de minimis as described below (other than a net
Columns (b), (c), and (d). Enter payments made by the operating loss carryover or a section 481(a) adjustment) may
date on line 9 for that column and after the date on line 9 of be annualized using the general rules of Regulations section
the preceding column. 1.6655-2(f), or, if the corporation chooses, may be taken into
account after annualizing the taxable income for the
Line 17. If any of the columns in line 17 shows an annualization period. A de minimis extraordinary item is any
underpayment, complete Part IV to figure the penalty. extraordinary item resulting from a transaction in which the
Part IV. Figuring the Penalty total extraordinary items resulting from such transaction is
less than $1 million.
Complete lines 19 through 38 to determine the amount of the
penalty. The penalty is figured for the period of In Schedule A, Part II, make the appropriate adjustments
underpayment using the underpayment rate determined to annualized taxable income before figuring the estimated
under section 6621. The period of underpayment generally tax for each reporting period. Similar adjustments must be
runs from the installment due date to the earlier of the date made, if applicable, to Part I of Schedule A if the adjusted
the underpayment is actually paid or the 15th day of the 4th seasonal installment method applies. See the instructions for
month after the close of the tax year. C corporations with tax Schedule A, lines 2, 9b, 21, and 23b below. For more
years ending June 30 and S corporations, use the 3rd month information regarding extraordinary items, see Regulations
instead of the 4th month. Form 990-PF and 990-T filers use section 1.6655-2(f)(3)(ii) and the examples in Regulations
the 5th month instead of the 4th month. section 1.6655-2(f)(3)(vii).

Note. A corporation with a short tax year ending anytime in Part I. Adjusted Seasonal Installment Method
June will be treated as if the short tax year ended on June 30. The corporation can use the adjusted seasonal installment
method only if the corporation's base period percentage for
A payment of estimated tax is applied against unpaid any 6 consecutive months of the tax year is 70% or more.
required installments in the order in which installments are The base period percentage for any period of 6 consecutive
required to be paid, regardless of the installment to which the months is the average of the 3 percentages figured by
payment pertains. dividing the taxable income for the corresponding
Example. A corporation with a calendar tax year 6-consecutive-month period in each of the 3 preceding tax
underpaid the April 15 installment by $1,000. The June 15 years by the total taxable income for each of the 3 preceding
installment requires a payment of $2,500. On June 10, the tax years, respectively. Figure the base period percentage
corporation deposits $2,500 to cover the June 15 installment. using the 6-month period in which the corporation normally
However, $1,000 of this payment is applied against the April receives the largest part of its taxable income.
15 installment. The penalty for the April 15 installment is Example. An amusement park with a 2022 calendar tax
figured from April 15 to June 10 (56 days). The remaining year receives the largest part of its taxable income during the
$1,500 is applied to the June 15 installment. 6-month period from May through October. To compute its
If the corporation has made more than one payment for a base period percentage for this 6-month period in 2022, the
required installment, attach a separate computation for each amusement park figures its taxable income for each May–
payment. Also, if the corporation has a fiscal tax year and October period in 2019, 2020, and 2021. It then divides the
has an underpayment period that extends beyond the latest taxable income for each May–October period by the total
date in Part IV, line 35, attach a computation of the penalty taxable income for that particular tax year. The resulting
for that period. Include the penalty in the total for line 38. percentages are 69% (0.69) for May–October 2019, 74%
(0.74) for May–October 2020, and 67% (0.67) for May–
Schedule A October 2021. Because the average of 69%, 74%, and 67%
is 70%, the base period percentage for May–October 2022 is
Extraordinary items. Generally, under the annualized 70%. Therefore, the amusement park qualifies for the
income installment method, extraordinary items must be adjusted seasonal installment method.
taken into account after annualizing the taxable income for
the annualization period. Similar rules apply in determining Line 2. If the corporation has certain extraordinary items,
taxable income under the adjusted seasonal installment special rules apply. Do not include on line 2 the de minimis
method. An extraordinary item includes: items that the corporation chooses to include on line 9b. See
• Any item identified in Regulations section Extraordinary items, earlier.
1.1502-76(b)(2)(ii)(C)(1), (2), (3), (4), (7), and (8); Line 9b. If the corporation has extraordinary items that are
• A net operating loss carryover; not de minimis, a net operating loss deduction, or a section
• A section 481(a) adjustment; 481(a) adjustment, special rules apply. Include these
• Net gain or loss from the disposition of 25% or more of the amounts on line 9b for the appropriate period. Also include
fair market value of the corporation's business assets during on line 9b the de minimis items that the corporation chooses
the tax year; to exclude from line 2. See Extraordinary items, earlier.
• Any other item designated as an extraordinary item in the
Internal Revenue Bulletin. Line 15. Only trusts liable for tax on unrelated business
taxable income may be liable for alternative minimum tax
These extraordinary items must be accounted for in the (AMT) on certain adjustments and tax preference items.
appropriate annualization period. However, a net operating Form 990-T filers compute AMT on Schedule I (Form 1041),
loss deduction and a section 481(a) adjustment (unless the Alternative Minimum Tax—Estates and Trusts, if applicable.
corporation makes the alternative choice under Regulations Figure alternative minimum taxable income (AMTI) based on
section 1.6655-2(f)(3)(ii)(C)) are treated as extraordinary the trust's income and deductions for the months shown in
items occurring on the first day of the tax year in which the the column headings directly above line 1.
item is taken into account in determining taxable income.

Instructions for Form 2220 (2022) -3-

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Line 16. Enter on line 16 any other taxes the corporation Corporations
owed for the months shown in each column heading directly 1st 2nd 3rd 4th
Installment Installment Installment Installment
above line 1. Include the same taxes used to figure Form Standard option 4 4 2 1.33333
2220, Part I, line 1, including the base erosion minimum tax, if
applicable. Do not include the personal holding company tax Option 1 6 3 1.71429 1.2
and interest due under the look-back method of section Option 2 4 2.4 1.5 1.09091
460(b)(2) for completed long-term contracts or section
167(g)(2) for property depreciated under the income forecast Tax-Exempt Organizations and Private Foundations
method. 1st 2nd 3rd 4th
Installment Installment Installment Installment
Line 18. Enter the credits the corporation is entitled to for Standard option 6 4 2 1.33333
the months shown in each column heading above line 1.
Enter the same type of credits that are allowed on Form Option 1 6 3 1.71429 1.2
2220, page 1, lines 1 and 2c.
Line 23b. If the corporation has extraordinary items that are
Part II. Annualized Income Installment Method not de minimis, a net operating loss deduction, or a section
Line 20. Annualization periods. Enter on line 20, columns 481(a) adjustment, special rules apply. Include these
(a) through (d), respectively, the annualization periods for the amounts on line 23b. Also include on line 23b the de minimis
option shown in the tables below. For example, if the extraordinary items that the corporation chooses to exclude
corporation elected Option 1, enter on line 20 the from line 21. See Extraordinary items, earlier.
annualization periods 2, 4, 7, and 10, in columns (a) through Line 25. Only trusts liable for tax on unrelated business
(d), respectively. taxable income may be liable for alternative minimum tax
Use Option 1 or Option 2 only if the corporation (AMT) on certain adjustments and tax preference items.
Form 990-T filers compute AMT on Schedule I (Form 1041).
CAUTION Different Annualization Periods for Corporate
! elected to do so by filing Form 8842, Election To Use Figure AMTI based on the trust's income and deductions for
Estimated Tax, by the due date of the first required the annualization period entered in each column on line 20.
installment payment. Once made, the election is irrevocable Line 26. Enter any other taxes the corporation owed for the
for the particular tax year. Option 2 is not available to months shown in each column on line 20. Include the same
tax-exempt organizations and private foundations. For these taxes used to figure Form 2220, Part I, line 1, including the
entities, see the options shown in the table in the instructions base erosion minimum tax, if applicable. Do not include the
for line 22. personal holding company tax and interest due under the
Corporations look-back method of section 460(b)(2) for completed
1st 2nd 3rd 4th long-term contracts or section 167(g)(2) for property
Installment Installment Installment Installment depreciated under the income forecast method.
Standard option 3369
Line 28. Enter the credits the corporation is entitled to for
Option 1 24710 the months shown in each column on line 20. Do not
Option 2 35811 annualize any credit. However, when figuring the credits,
annualize any item of income or deduction used to figure the
Tax-Exempt Organizations and Private Foundations credit.
1st 2nd 3rd 4th
Installment Installment Installment Installment Part III. Required Installments
Standard option 2369
Line 33. Before completing line 33 in columns (b) through
Option 1 24710 (d), complete lines 34 through 38 in each of the preceding
columns. For example, complete lines 34 through 38 in
Line 21. Enter on line 21 the taxable income (line 30, Form column (a) before completing line 33 in column (b).
1120; or the applicable line for other income tax returns) that Line 35. Enter in each column of line 35, 25% of the amount
the corporation received for the months entered for each from page 1, Part I, line 5. Large corporations, see the
annualization period in columns (a) through (d) on line 20. If instructions for line 10 for the amounts to enter.
the corporation has extraordinary items, special rules apply.
Do not include on line 21 the de minimis extraordinary items Line 38. For each installment, enter the smaller of line 34 or
that the corporation chooses to include on line 23b. See line 37 on line 38. Also enter the result on page 1, Part III,
Extraordinary items, earlier. line 10.

Line 22. Annualization amounts. Enter on line 22, Paperwork Reduction Act Notice. We ask for the
columns (a) through (d), respectively, the annualization information on this form to carry out the Internal Revenue
amounts shown in the tables below for the option used for laws of the United States. You are required to give us the
line 20 above. For example, if the corporation elected Option information. We need it to ensure that you are complying with
1, enter on line 22 the annualization amounts 6, 3, 1.71429, these laws and to allow us to figure and collect the right
and 1.2, in columns (a) through (d), respectively. amount of tax.
You are not 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 can become material in the

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administration of any Internal Revenue law. Generally, tax         estimates shown in the instructions for their business income 
returns and return information are confidential, as required by    tax return.
section 6103.
                                                                   If you have comments concerning the accuracy of these 
The time needed to complete and file this form will vary           time estimates or suggestions for making this form simpler, 
depending on individual circumstances. The estimated               we would be happy to hear from you. See the instructions for 
burden for business taxpayers filing this form is approved         the tax return with which this form is filed.
under OMB control number 1545-0123 and is included in the 

Instructions for Form 2220 (2022)                               -5-

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