2023

Instructions for Form 2220

Underpayment of Estimated Tax by Corporations

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments affecting Form 

2220 and its instructions, such as legislation enacted after 

they were published, go to IRS.gov/Form2220.

What’s New

Relief from additions to tax for underpayments applicable to the new corporate alternative minimum tax 

(CAMT). For tax year 2023, the IRS will waive the penalty for 

failure to make estimated tax payments for taxes attributable 

to a corporate alternative minimum tax (CAMT) tax liability. 

Affected corporations must still file the 2023 Form 2220, even 

if they owe no estimated tax penalty. However, affected 

corporations may exclude the CAMT tax liability when 

calculating the required annual payment on Form 2220. 

Affected corporations must also include an amount of 

estimated tax penalty on Line 34 of Form 1120, U.S. 

Corporation Income Tax Return (or other appropriate line of 

the corporation's income tax return), even if that amount is 

zero. Failure to follow these instructions could result in 

affected corporations receiving a penalty notice that will 

require an abatement request to apply the relief provided by 

Notice 2023-42. See Notice 2023-42, 2023-26 I.R.B. 1085, 

available at IRS.gov/irb/2023-26_IRB#NOT-2023-42. Also, 

see the instructions for Part I, Line 1.

General Instructions

Purpose of Form

Corporations (including S corporations), tax-exempt 

organizations subject to the unrelated business income tax, 

and private foundations use Form 2220 to determine:

• Whether they are subject to the penalty for underpayment 

of estimated tax and, if so,

• The amount of the underpayment penalty for the period 

that applies.

Who Must File

Generally, the corporation does not have to file this form with 

its income tax return because the IRS will figure the amount 

of any penalty and notify the corporation of any amount due. 

However, even if the corporation does not owe a penalty, 

complete and attach this form to the corporation's tax return if 

the Part I, line 3, amount is $500 or more and any of the 

following apply.

1. The adjusted seasonal installment method is used.

2. The annualized income installment method is used.

3. The corporation is a large corporation (as defined in 

the instructions for Part II, line 8) figuring its first required 

installment based on the prior year's tax.

Who Must Pay the Underpayment 

Penalty

Generally, a corporation is subject to the penalty if it did not 

timely pay at least the smaller of:

1. The tax shown on its 2023 return, or

2. The tax shown on its 2022 return (if it filed a 2022 

return showing at least some amount of tax and the return 

was for a full 12 months). However, a large corporation can 

base only its first required installment on the prior year's tax.

In these instructions, “return” generally refers to the 

corporation's original return. However, an amended return is 

considered the original return if the amended return is filed by 

the due date (including extensions) of the original return. 

Also, for purposes of determining a required installment of a 

corporation’s estimated tax, if an amended return is filed for 

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 

earlier due date even if it paid enough tax later to make up 

the underpayment. This is true even if the corporation is due 

a refund when its return is filed. However, the corporation 

may be able to reduce or eliminate the penalty by using the 

annualized income installment method or the adjusted 

seasonal installment method. See the instructions for Part II 

for details.

Exception to the Penalty

A corporation will not have to pay a penalty if the tax shown 

on the corporation's 2023 return (the Form 2220, Part I, 

line 3, amount) is less than $500.

How To Use Form 2220

• Complete Part I, lines 1 through 3. If line 3 is $500 or more, 

complete the rest of Part I to determine the required annual 

payment. Then, go to Part II.

• Check one or more boxes in Part II if the corporation uses 

the adjusted seasonal installment method, the annualized 

income installment method, or if the corporation is a large 

corporation.

If the corporation checked a box in Part II, attach Form 

2220 to the income tax return. Be sure to check the box on 

Form 1120, page 1, line 34; or the comparable line of any 

other income tax return the corporation is required to file (for 

example, Form 1120-C, 1120-L, or 1120-S).

• Complete Part III to determine the underpayment for any of 

the installment due dates.

• If there is an underpayment on Part III, line 17 (column (a), 

(b), (c), or (d)), go to Part IV to figure the penalty.

• Complete Schedule A if the corporation uses the adjusted 

seasonal installment method and/or the annualized income 

installment method.

Dec 20, 2023 Cat. No. 64293P
Specific Instructions

Part I. Required Annual Payment

Complete lines 1 through 5 to figure the corporation's 

required annual payment.

Line 1. Generally, enter the tax from Form 1120, line 31; or 

the applicable line for other income tax returns. However, if 

that amount includes any tax attributable to a sale described 

in section 338(a)(1), do not include that tax on line 1. Instead, 

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 

amount does not apply if a section 338(h)(10) election is 

made.

Also, for tax year 2023, if the amount from Form 1120, 

line 31, includes any CAMT from Form 1120, Schedule J, 

line 3 (or the applicable line for other income tax returns), do 

not include that amount on line 1 of Form 2220. Instead write 

"CAMT" and the amount and show the amount of tax in 

brackets on the dotted line next to line 1.

For information on how to figure the total tax for estimated 

tax purposes for other entities, see the following forms or their 

instructions.

• 990-PF • 1120-FSC • 1120-REIT

• 990-T • 1120-L • 1120-RIC

• 1120-C • 1120-ND • 1120-S

• 1120-F • 1120-PC • 1120-SF

Line 2c. Enter the amount from Form 1120, Schedule J, Part 

II, line 20b, or the applicable line for other income tax returns.

Line 4. All filers (other than S corporations). Figure the 

corporation's 2022 tax the same way the amount on line 3 of 

this form was determined, using the taxes and credits from its 

2022 tax return. However, skip line 4 and enter on line 5 the 

amount from line 3 if either of the following applies.

• The corporation did not file a tax return for 2022 that 

showed a liability for at least some amount of tax.

• The corporation had a 2022 tax year of less than 12 

months.

S corporations. Enter on line 4 the sum of:

1. The total of the investment credit recapture tax and the 

built-in gains tax shown on the return for the 2023 tax year, 

and

2. Any excess net passive income tax shown on the S 

corporation's return for the 2022 tax year.

If the 2022 tax year was less than 12 months, skip line 4 

and enter on line 5 the amount from line 3.

Part II. Reasons for Filing

Lines 6 and 7. Adjusted seasonal installment method 

and/or annualized income installment method. If the 

corporation's income varied during the year because, for 

example, it operated its business on a seasonal basis, it may 

be able to lower or eliminate the amount of one or more 

required installments by using the adjusted seasonal 

installment method and/or the annualized income installment 

method.

Example. A ski shop, which receives most of its income 

during the winter months, may benefit from using one or both 

of these methods to figure its required installments. The 

annualized income installment or adjusted seasonal 

installment may be less than the required installment under 

the regular method for one or more due dates. Using one or 

both of these methods may reduce or eliminate the penalty 

for those due dates.

Use Schedule A (Form 2220, pages 3 and 4) to figure one 

or more required installments. If Schedule A is used for any 

payment due date, it must be used for all payment due dates. 

To arrive at the amount of each required installment, 

Schedule A automatically selects the smallest of:

• The adjusted seasonal installment (if applicable),

• The annualized income installment (if applicable), or

• The regular installment under section 6655(d)(1) 

(increased by any recapture of a reduction in a required 

installment under section 6655(e)(1)(B)).

Follow the steps below to determine which parts of the 

form have to be completed.

• If the corporation is using only the adjusted seasonal 

installment method, check the box in Part II, line 6, and 

complete Schedule A, Parts I and III.

• If the corporation is using only the annualized income 

installment method, check the box in Part II, line 7, and 

complete Schedule A, Parts II and III.

• If the corporation is using both methods, check the boxes 

in Part II, lines 6 and 7, and complete all three parts of 

Schedule A.

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 2023 tax year, or if less, the number of years 

the corporation has been in existence. See Regulations 

section 1.6655-4.

Taxable income, for this purpose, is modified to exclude 

net operating loss and capital loss carrybacks and 

carryovers. Members of a controlled group, as defined in 

section 1563, must divide the $1 million amount among 

themselves under rules similar to those in section 1561. If the 

corporation is a large corporation figuring its first required 

installment based on the prior year's tax, check the box on 

Part II, line 8, and, if applicable, check the box(es) on Part II, 

line 6 and/or line 7. Also, if applicable, complete Schedule A, 

Parts I, II, and III, as discussed below in the instructions for 

line 10.

Part III. Figuring the Underpayment

Line 9. Installment due dates. The corporation is generally 

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.

Note. Multiple columns can have the same due date if the 

due date has been extended by relief provided by the IRS (for 

example, disaster relief).

Line 10. Required installments. If the box on line 6 and/or 

line 7 is checked, enter the amounts from Schedule A, 

line 38.

Large corporations. Large corporations, follow the 

instructions below.

1. If the box on line 8 (but not line 6 or line 7) is checked 

and line 3 is smaller than line 4, enter 25% of line 3 in 

columns (a) through (d) of line 10.

2 Instructions for Form 2220 (2023)
2. If the box on line 8 (but not line 6 or line 7) is checked 

and line 4 is smaller than line 3, enter 25% of line 4 in column 

(a) of line 10. In column (b), figure the amount to enter as 

follows:

a. Subtract line 4 from line 3,

b. Add the result to the amount on line 3, and

c. Multiply the total in item b above by 25%, and enter the 

result in column (b).

In columns (c) and (d), enter 25% of line 3.

3. If the box on line 8 and the box on line 6 and/or line 7 

are checked, follow the instructions in items 1 and 2 above 

(substituting "Schedule A, line 35" for "line 10" in the 

calculation). Enter the amounts from Schedule A, line 38, on 

line 10.

Line 11. Enter the estimated tax payments made by the 

corporation for its tax year as indicated below. Include any 

overpayment from the corporation's 2022 tax return that was 

credited to the corporation's 2023 estimated tax. If an 

installment is due on a Saturday, Sunday, or legal holiday, 

payments made on the next day that is not a Saturday, 

Sunday, or legal holiday are considered made timely to the 

extent the payment is applied against that required 

installment.

Column (a). Enter payments made by the date on line 9, 

column (a).

Columns (b), (c), and (d). Enter payments made by the 

date on line 9 for that column and after the date on line 9 of 

the preceding column.

Line 17. If any of the columns in line 17 shows an 

underpayment, complete Part IV to figure the penalty.

Part IV. Figuring the Penalty

Complete lines 19 through 38 to determine the amount of the 

penalty. The penalty is figured for the period of underpayment 

using the underpayment rate determined under section 6621. 

The period of underpayment generally runs from the 

installment due date to the earlier of the date the 

underpayment is actually paid or the 15th day of the 4th 

month after the close of the tax year. C corporations with tax 

years ending June 30 and S corporations, use the 3rd month 

instead of the 4th month. Form 990-PF and 990-T filers use 

the 5th month instead of the 4th month.

Note. A corporation with a short tax year ending anytime in 

June will be treated as if the short tax year ended on June 30.

A payment of estimated tax is applied against unpaid 

required installments in the order in which installments are 

required to be paid, regardless of the installment to which the 

payment pertains.

Example. A corporation with a calendar tax year 

underpaid the April 15 installment by $1,000. The June 15 

installment requires a payment of $2,500. On June 10, the 

corporation deposits $2,500 to cover the June 15 installment. 

However, $1,000 of this payment is applied against the April 

15 installment. The penalty for the April 15 installment is 

figured from April 15 to June 10 (56 days). The remaining 

$1,500 is applied to the June 15 installment.

If the corporation has made more than one payment for a 

required installment, attach a separate computation for each 

payment. Also, if the corporation has a fiscal tax year and has 

an underpayment period that extends beyond the latest date 

in Part IV, line 35, attach a computation of the penalty for that 

period. Include the penalty in the total for line 38.

Schedule A

Extraordinary items. Generally, under the annualized 

income installment method, extraordinary items must be 

taken into account after annualizing the taxable income for 

the annualization period. Similar rules apply in determining 

taxable income under the adjusted seasonal installment 

method. An extraordinary item includes:

• Any item identified in Regulations section

1.1502-76(b)(2)(ii)(C)(1), (2), (3), (4), (7), and (8);

• A net operating loss carryover;

• A section 481(a) adjustment;

• Net gain or loss from the disposition of 25% or more of the 

fair market value of the corporation's business assets during 

the tax year;

• Any other item designated as an extraordinary item in the 

Internal Revenue Bulletin.

These extraordinary items must be accounted for in the 

appropriate annualization period. However, a net operating 

loss deduction and a section 481(a) adjustment (unless the 

corporation makes the alternative choice under Regulations 

section 1.6655-2(f)(3)(ii)(C)) are treated as extraordinary 

items occurring on the first day of the tax year in which the 

item is taken into account in determining taxable income.

De minimis rule. Extraordinary items identified above that 

are de minimis as described below (other than a net 

operating loss carryover or a section 481(a) adjustment) may 

be annualized using the general rules of Regulations section 

1.6655-2(f), or, if the corporation chooses, may be taken into 

account after annualizing the taxable income for the 

annualization period. A de minimis extraordinary item is any 

extraordinary item resulting from a transaction in which the 

total extraordinary items resulting from such transaction is 

less than $1 million.

In Schedule A, Part II, make the appropriate adjustments 

to annualized taxable income before figuring the estimated 

tax for each reporting period. Similar adjustments must be 

made, if applicable, to Part I of Schedule A if the adjusted 

seasonal installment method applies. See the instructions for 

Schedule A, lines 2, 9b, 21, and 23b below. For more 

information regarding extraordinary items, see Regulations 

section 1.6655-2(f)(3)(ii) and the examples in Regulations 

section 1.6655-2(f)(3)(vii).

Part I. Adjusted Seasonal Installment Method

The corporation can use the adjusted seasonal installment 

method only if the corporation's base period percentage for 

any 6 consecutive months of the tax year is 70% or more. 

The base period percentage for any period of 6 consecutive 

months is the average of the 3 percentages figured by 

dividing the taxable income for the corresponding 

6-consecutive-month period in each of the 3 preceding tax 

years by the total taxable income for each of the 3 preceding 

tax years, respectively. Figure the base period percentage 

using the 6-month period in which the corporation normally 

receives the largest part of its taxable income.

Example. An amusement park with a 2023 calendar tax 

year receives the largest part of its taxable income during the 

6-month period from May through October. To compute its 

base period percentage for this 6-month period in 2023, the 

amusement park figures its taxable income for each May–

October period in 2020, 2021, and 2022. It then divides the 

taxable income for each May–October period by the total 

Instructions for Form 2220 (2023) 3
taxable income for that particular tax year. The resulting 

percentages are 69% (0.69) for May–October 2020, 74% 

(0.74) for May–October 2021, and 67% (0.67) for May–

October 2022. Because the average of 69%, 74%, and 67% 

is 70%, the base period percentage for May–October 2023 is 

70%. Therefore, the amusement park qualifies for the 

adjusted seasonal installment method.

Line 2. If the corporation has certain extraordinary items, 

special rules apply. Do not include on line 2 the de minimis 

items that the corporation chooses to include on line 9b. See 

Extraordinary items, earlier.

Line 9b. If the corporation has extraordinary items that are 

not de minimis, a net operating loss deduction, or a section 

481(a) adjustment, special rules apply. Include these 

amounts on line 9b for the appropriate period. Also include 

on line 9b the de minimis items that the corporation chooses 

to exclude from line 2. See Extraordinary items, earlier.

Line 15. Trusts liable for tax on unrelated business taxable 

income may be liable for alternative minimum tax (AMT) on 

certain adjustments and tax preference items. Form 990-T 

filers compute AMT on Schedule I (Form 1041), Alternative 

Minimum Tax—Estates and Trusts, if applicable. Figure 

alternative minimum taxable income (AMTI) based on the 

trust's income and deductions for the months shown in the 

column headings directly above line 1.

Note. For tax year 2023, applicable corporations may 

exclude the CAMT tax liability when calculating the required 

annual tax payment on Form 2220. See Relief from additions 

to tax for underpayments applicable to the new corporate 

alternative minimum tax (CAMT), earlier.

Line 16. Enter on line 16 any other taxes the corporation 

owed for the months shown in each column heading directly 

above line 1. Include the same taxes used to figure Form 

2220, Part I, line 1, including the base erosion minimum tax, if 

applicable. Do not include the personal holding company tax 

and interest due under the look-back method of section 

460(b)(2) for completed long-term contracts or section 167(g)

(2) for property depreciated under the income forecast 

method.

Line 18. Enter the credits the corporation is entitled to for the 

months shown in each column heading above line 1. Enter 

the same type of credits that are allowed on Form 2220, 

page 1, lines 1 and 2c.

Part II. Annualized Income Installment Method

Line 20. Annualization periods. Enter on line 20, columns 

(a) through (d), respectively, the annualization periods for the 

option shown in the tables below. For example, if the 

corporation elected Option 1, enter on line 20 the 

annualization periods 2, 4, 7, and 10, in columns (a) through 

(d), respectively.

Use Option 1 or Option 2 only if the corporation 

elected to do so by filing Form 8842, Election To Use 

Different Annualization Periods for Corporate 

Estimated Tax, by the due date of the first required 

installment payment. Once made, the election is irrevocable 

for the particular tax year. Option 2 is not available to 

tax-exempt organizations and private foundations. For these 

entities, see the options shown in the table in the instructions 

for line 22.

CAUTION

!

Option 1

Option 2

Standard option

3 5 8 11

2 4 7 10

3369

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Corporations

Option 1

Standard option

2 4 7 10

2369

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Tax-Exempt Organizations and Private Foundations

Line 21. Enter on line 21 the taxable income (line 30, Form 

1120; or the applicable line for other income tax returns) that 

the corporation received for the months entered for each 

annualization period in columns (a) through (d) on line 20. If 

the corporation has extraordinary items, special rules apply. 

Do not include on line 21 the de minimis extraordinary items 

that the corporation chooses to include on line 23b. See 

Extraordinary items, earlier.

Line 22. Annualization amounts. Enter on line 22, 

columns (a) through (d), respectively, the annualization 

amounts shown in the tables below for the option used for 

line 20 above. For example, if the corporation elected Option 

1, enter on line 22 the annualization amounts 6, 3, 1.71429, 

and 1.2, in columns (a) through (d), respectively.

4 2.4 1.5 1.09091

6 3 1.71429 1.2

4 4 2 1.33333

Option 1

Option 2

Standard option

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Corporations

6 3 1.71429 1.2

6 4 2 1.33333

Option 1

Standard option

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Tax-Exempt Organizations and Private Foundations

Line 23b. If the corporation has extraordinary items that are 

not de minimis, a net operating loss deduction, or a section 

481(a) adjustment, special rules apply. Include these 

amounts on line 23b. Also include on line 23b the de minimis 

extraordinary items that the corporation chooses to exclude 

from line 21. See Extraordinary items, earlier.

Line 25. Trusts liable for tax on unrelated business taxable 

income may be liable for alternative minimum tax (AMT) on 

certain adjustments and tax preference items. Form 990-T 

filers compute AMT on Schedule I (Form 1041). Figure AMTI 

based on the trust's income and deductions for the 

annualization period entered in each column on line 20.

Note. For tax year 2023, applicable corporations may 

exclude the CAMT tax liability when calculating the required 

annual tax payment on Form 2220. See Relief from additions 

to tax for underpayments applicable to the new corporate 

alternative minimum tax (CAMT), earlier.

Line 26. Enter any other taxes the corporation owed for the 

months shown in each column on line 20. Include the same 

taxes used to figure Form 2220, Part I, line 1, including the 

base erosion minimum tax, if applicable. Do not include the 

personal holding company tax and interest due under the 

4 Instructions for Form 2220 (2023)
look-back method of section 460(b)(2) for completed 

long-term contracts or section 167(g)(2) for property 

depreciated under the income forecast method.

Line 28. Enter the credits the corporation is entitled to for the 

months shown in each column on line 20. Do not annualize 

any credit. However, when figuring the credits, annualize any 

item of income or deduction used to figure the credit.

Part III. Required Installments

Line 33. Before completing line 33 in columns (b) through 

(d), complete lines 34 through 38 in each of the preceding 

columns. For example, complete lines 34 through 38 in 

column (a) before completing line 33 in column (b).

Line 35. Enter in each column of line 35, 25% of the amount 

from page 1, Part I, line 5. Large corporations, see the 

instructions for line 10 for the amounts to enter.

Line 38. For each installment, enter the smaller of line 34 or 

line 37 on line 38. Also enter the result on page 1, Part III, 

line 10.

Paperwork Reduction Act Notice. We ask for the 

information on this form to carry out the Internal Revenue 

laws of the United States. You are required to give us the 

information. We need it to ensure that you are complying with 

these laws and to allow us to figure and collect the right 

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 

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 and is included in the 

estimates shown in the instructions for their business income 

tax return.

If you have comments concerning the accuracy of these 

time estimates or suggestions for making this form simpler, 

we would be happy to hear from you. See the instructions for 

the tax return with which this form is filed.

Instructions for Form 2220 (2023) 5