General Instructions

Who Must Make Estimated Tax Payments

  • Corporations generally must make estimated tax payments if they expect their estimated tax (income tax less credits) to be $500 or more.

  • S corporations must make estimated tax payments for certain taxes. S corporations should see the Instructions for Form 1120S, U.S. Income Tax Return for an S Corporation, to figure their estimated tax payments.

  • Tax-exempt corporations, tax-exempt trusts, and domestic private foundations must make estimated tax payments for certain taxes. These entities should see the instructions for their tax return, to figure the amount of their estimated tax payments.

When To Make Estimated Tax Payments

The installments generally are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next regular business day.

Underpayment of Estimated Tax

A corporation that does not make estimated tax payments when due may be subject to an underpayment penalty for the period of underpayment. Use Form 2220, Underpayment of Estimated Tax by Corporations, to see if the corporation owes a penalty and to figure the amount of the penalty. See Form 2220 and the Instructions for Form 2220.

Overpayment of Estimated Tax

A corporation that has overpaid its estimated tax may apply for a quick refund if the overpayment is at least 10% of its expected income tax liability and at least $500. To apply, file Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, after the end of the tax year and before the corporation files its income tax return. Form 4466 may not be filed later than the 15th day of the 3rd month after the end of the tax year.

Methods of Tax Payment

Some corporations (described below) are required to electronically deposit all depository taxes, including estimated tax payments.

Electronic Deposit Requirement

Corporations must use electronic funds transfer to make all federal tax deposits (such as deposits of employment, excise, and corporate income tax). This includes installment payments of estimated tax. Generally, electronic funds transfer is made using the Electronic Federal Tax Payment System (EFTPS). However, if the corporation does not want to use EFTPS, it can arrange for its tax professional, financial institution, payroll service, or other trusted third party to make deposits on its behalf. Also, it may arrange for its financial institution to initiate a same-day tax wire payment (discussed below) on its behalf. EFTPS is a free service provided by the Department of the Treasury. Services provided by a tax professional, financial institution, payroll service, or other third party may have a fee.

To get more information about EFTPS or to enroll in EFTPS, visit www.eftps.gov or call 1-800-555-4477.

Depositing on time.   For deposits made by EFTPS to be on time, the corporation must initiate the deposit by 8 p.m. Eastern time the day before the date the deposit is due. If the corporation uses a third party to make deposits on its behalf, they may have different cutoff times.

Same-day payment option.   If the corporation fails to initiate a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, it can still make the deposit on time by using the Federal Tax Application (FTA). Before using the same-day payment option, the corporation will need to make arrangements with its financial institution ahead of time. Please check with the financial institution regarding availability, deadlines, and costs. To learn more about making a same-day payment and download the Same-Day Payment Worksheet, visit www.eftps.gov.

Foreign corporations.   If a foreign corporation maintains an office or place of business in the United States, it must use electronic funds transfer (as discussed above) to make installment payments of estimated tax.

  If the foreign corporation does not maintain an office or place of business in the United States, it may pay the estimated tax by EFTPS if it has a U.S. bank account. The foreign corporation may also arrange for its financial institution to initiate a same-day payment on its behalf or can arrange for either a qualified intermediary, tax professional, payroll service, or other trusted third party to make a deposit on its behalf using a master account.

  In addition, the foreign corporation has the option to pay the estimated tax due by check or money order, payable to the “United States Treasury.” To ensure proper crediting, enter the foreign corporation's EIN, “Form 1120-F (or 1120-FSC, if applicable) estimated tax payment,” and the tax period to which the payment applies on the check or money order. The payments must be sent to the Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409.

Refiguring Estimated Tax

If, after the corporation figures and deposits estimated tax, it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments. If earlier installments were underpaid, the corporation may owe a penalty.

An immediate catchup payment should be made to reduce the amount of any penalty resulting from the underpayment of any earlier installments, whether caused by a change in estimate, failure to make a deposit, or a mistake.


More Online Instructions