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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.
All corporations incorporated, qualified, or doing business in California, whether active or inactive, must make franchise or income estimated tax payments. This requirement also applies to limited liability companies that have elected to be treated as corporations.
Current rates 7%Personal income tax under- and overpayments7%Corporation underpayment7%Estimate penalties5%Corporation overpayments
Corporations are required to pay the following percentages of the estimated tax liability during the taxable year: 30% for the first required installment. 40% for the second required installment. No estimated tax payment is required for the third installment.
You may qualify for an exception to the penalty if you dont have a liability the prior year, youre a U.S. citizen or a resident alien the entire year, and your prior tax year covered 12 months. You may also qualify for the estimated tax safe harbor penalty exception.
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