Instructions for Form 2220

2025

Instructions for Form 2220

Underpayment of Estimated Tax by Corporations

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

Extension of relief from additions to tax underpayments

applicable to the corporate alternative minimum tax

(CAMT). For tax years beginning in 2025, the IRS will

continue to waive the penalty imposed under section 6655 for

failure to make estimated tax payments attributable to a

CAMT liability. Affected corporations must still file the 2025

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. See

Notice 2025-27, 2025-26 I.R.B. 1611. Also, see the

instructions for Form 2220, 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.

Oct 28, 2025

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 2025 return, or

2. The tax shown on its 2024 return (if it filed a 2024

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 2025 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.

Instructions for Form 2220 (2025) Catalog Number 64293P

Department of the Treasury Internal Revenue Service www.irs.gov

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, if the amount from Form 1120, line 31, includes

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

• 990-T

• 1120-C

• 1120-F

• 1120-FSC

• 1120-L

• 1120-ND

• 1120-PC

• 1120-REIT

• 1120-RIC

• 1120-S

• 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 2024 tax the same way the amount on line 3 of

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

2024 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 2024 that

showed a liability for at least some amount of tax.

• The corporation had a 2024 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 2025 tax year,

and

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

corporation's return for the 2024 tax year.

If the 2024 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.

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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 2025 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.

Instructions for Form 2220 (2025)

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 2024 tax return that was

credited to the corporation's 2025 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.

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 third month

instead of the fourth month. Form 990-PF and 990-T filers

use the fifth month instead of the fourth 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.

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

Instructions for Form 2220 (2025)

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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 three 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 2025 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 2025, the

amusement park figures its taxable income for each May–

October period in 2022, 2023, and 2024. It then divides the

taxable income for each May–October period by the total

taxable income for that particular tax year. The resulting

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percentages are 69% (0.69) for May–October 2022, 74%

(0.74) for May–October 2023, and 67% (0.67) for May–

October 2024. Because the average of 69%, 74%, and 67%

is 70%, the base period percentage for May–October 2025 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 2025, 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 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.

Caution: 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.

Instructions for Form 2220 (2025)

Corporations

1st

2nd

3rd

4th

Installment Installment Installment Installment

Standard option

3

3

6

9

Option 1

2

4

7

10

Option 2

3

5

8

11

Tax-Exempt Organizations and Private Foundations

1st

2nd

3rd

4th

Installment Installment Installment Installment

Standard option

2

3

6

9

Option 1

2

4

7

10

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.

Corporations

1st

2nd

3rd

4th

Installment Installment Installment Installment

Standard option

4

Option 1

6

3

1.71429

1.2

Option 2

4

2.4

1.5

1.09091

4

2

1.33333

Tax-Exempt Organizations and Private Foundations

1st

2nd

3rd

4th

Installment Installment Installment Installment

Standard option

6

4

2

Option 1

6

3

1.71429

1.33333

1.2

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 2025, applicable corporations may

exclude certain CAMT tax liability when calculating the

Instructions for Form 2220 (2025)

required annual tax payment on Form 2220. See Relief from

additions to tax for underpayments applicable to the

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

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.

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