Form 1120-W Estimated Tax for Corporations

Estimated Tax for Corporations

f1120w

Estimated Tax for Corporations

OMB: 1545-0975

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 1 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form

1120-W

(WORKSHEET)
Department of the Treasury
Internal Revenue Service

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Action

Date

O.K. to print
Revised proofs
requested

Estimated Tax for Corporations
For calendar year 2006, or tax year beginning

, 2006, and ending

OMB No. 1545-0975
, 20

2006

(Keep for the corporation’s records—Do not send to the Internal Revenue Service.)

1
Taxable income expected for the tax year
Qualified personal service corporations (defined in the instructions), skip lines 2 through 13 and
go to line 14. Members of a controlled group, see instructions.
2
Enter the smaller of line 1 or $50,000
Multiply line 2 by 15%
4
Subtract line 2 from line 1
5
Enter the smaller of line 4 or $25,000
Multiply line 5 by 25%
7
Subtract line 5 from line 4
8
Enter the smaller of line 7 or $9,925,000
Multiply line 8 by 34%
10
Subtract line 8 from line 7
Multiply line 10 by 35%
If line 1 is greater than $100,000, enter the smaller of (a) 5% of the excess over $100,000 or
(b) $11,750. Otherwise, enter -0If line 1 is greater than $15 million, enter the smaller of (a) 3% of the excess over $15 million
or (b) $100,000. Otherwise, enter -0Add lines 3, 6, 9, and 11 through 13. (Qualified personal service corporations, multiply line 1 by
35%.)

9
11
12
13
14

Alternative minimum tax (see instructions)

Total. Add lines 14 and 15

Tax credits (see instructions)

Subtract line 17 from line 16

Other taxes (see instructions)

Total tax. Add lines 18 and 19

Credit for Federal tax paid on fuels (see instructions)

Subtract line 21 from line 20. Note: If the result is less than $500, the corporation is not required
to make estimated tax payments

23a Enter the tax shown on the corporation’s 2005 tax return (see instructions). Caution: If the tax
is zero or the tax year was for less than 12 months, skip this line and enter the amount from line
22 on line 23b
b Enter the smaller of line 22 or line 23a. If the corporation is required to skip line 23a, enter the
amount from line 22
(b)
(c)
(a)
24
25

Installment due dates (see
䊳
instructions)

Required installments. Enter
25% of line 23b in columns
(a) through (d) unless the
corporation
uses
the
annualized income installment
method or adjusted seasonal
installment method or is
a “large corporation” (see
instructions)

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 11525G

Signature

23a
23b
(d)

Form

1120-W

(2006)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 2 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1120-W (WORKSHEET) 2006

Page

Schedule A

Adjusted Seasonal Installment Method and Annualized Income Installment Method
(see instructions)
Part I
Adjusted Seasonal Installment Method
(a)
(b)
(c)
(Use this method only if the base period percentage for any 6
consecutive months is at least 70%.)
1

(d)

First 3 months

First 5 months

First 8 months

First 11 months

First 4 months

First 6 months

First 9 months

Entire year

Enter taxable income for the following periods:
a Tax year beginning in 2003.

b Tax year beginning in 2004.

c Tax year beginning in 2005.

Enter taxable income for each period for the tax year
beginning in 2006.

Enter taxable income for the following periods:

a Tax year beginning in 2003.

b Tax year beginning in 2004.

c Tax year beginning in 2005.

Divide the amount in each column on line 1a by the amount
in column (d) on line 3a.

Divide the amount in each column on line 1b by the amount
in column (d) on line 3b.

Divide the amount in each column on line 1c by the amount
in column (d) on line 3c.

Add lines 4 through 6.

Divide line 7 by 3.

Divide line 2 by line 8.

Figure the tax on the amount on line 9 by following the same
steps used to figure the tax for line 14, page 1, of Form 1120-W.

11a Divide the amount in columns (a) through (c) on line 3a by
the amount in column (d) on line 3a.

11a

b Divide the amount in columns (a) through (c) on line 3b by
the amount in column (d) on line 3b.

11b

c Divide the amount in columns (a) through (c) on line 3c by
the amount in column (d) on line 3c.

11c

Add lines 11a through 11c.

Divide line 12 by 3.

Multiply the amount in columns (a) through (c) of line 10 by
the amount in the corresponding column of line 13. In
column (d), enter the amount from line 10, column (d).

Enter any alternative minimum tax for each payment period
(see instructions).

Enter any other taxes for each payment period (see
instructions).

Add lines 14 through 16.

For each period, enter the same type of credits as allowed on
lines 17 and 21, page 1, of Form 1120-W (see instructions).

Subtract line 18 from line 17. If zero or less, enter -0-.

Form

1120-W

(2006)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 3 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1120-W (WORKSHEET) 2006

Part II

Page

Annualized Income Installment Method

Annualization periods (see instructions).

Enter taxable income for each annualization period (see
instructions).

Annualization amounts (see instructions).

Annualized taxable income. Multiply line 21 by line 22.

Figure the tax on the amount in each column on line 23 by
following the same steps used to figure the tax for line 14,
page 1, of Form 1120-W.

Enter any alternative minimum tax for each annualization
period (see instructions).

Enter any other taxes for each annualization period (see
instructions).

Total tax. Add lines 24 through 26.

For each annualization period, enter the same type of credits
as allowed on lines 17 and 21, page 1, of Form 1120-W (see
instructions).

Total tax after credits. Subtract line 28 from line 27. If zero
or less, enter -0-.

Applicable percentage.

Multiply line 29 by line 30.

Part III

(a)

(b)

(c)

(d)

First ______
months

25%

50%

75%

100%

1st installment

2nd installment

3rd installment

4th installment

Required Installments

Note: Complete lines 32 through 38 of one column before
completing the next column.
32

If only Part I or Part II is completed, enter the amount in
each column from line 19 or line 31. If both parts are
completed, enter the smaller of the amounts in each column
from line 19 or line 31.

Add the amounts in all preceding columns of line 38 (see
instructions).

Adjusted seasonal or annualized income installments.
Subtract line 33 from line 32. If zero or less, enter -0-.

Enter 25% of line 23b, page 1, in each column. (Note: “Large
corporations,” see the instructions for line 25 for the amount
to enter.)

Subtract line 38 of the preceding column from line 37 of the
preceding column.

Add lines 35 and 36.

Required installments. Enter the smaller of line 34 or
line 37 here and on line 25, page 1 (see instructions).

38
Form

1120-W

(2006)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 4 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1120-W (WORKSHEET) 2006

Page

IRS E-Services Make Taxes Easier

Depository Methods of Tax Payment

Now, more than ever before, businesses can enjoy the benefits of
filing and paying their federal taxes electronically. Whether you rely
on a tax professional or handle your own taxes, the IRS offers you
convenient programs to make filing and paying taxes easier.
● You can e-file your Form 1120 tax return and certain other
business income tax returns; Form 940 and 941 employment tax
returns; Form 1099 and certain other information returns. Visit
www.irs.gov/efile for more information.
● You can pay taxes online or by phone using the free Electronic
Federal Tax Payment System (EFTPS). Visit www.eftps.gov or call
1-800-555-4477 for more information. EFTPS is required for certain
corporations; see Depository Methods of Tax Payment below.

Some corporations (described below) are required to electronically
deposit all depository taxes, including estimated tax payments.
Electronic deposit requirement. The corporation must make
electronic deposits of all depository taxes (such as employment tax,
excise tax, and corporate income tax) using the Electronic Federal
Tax Payment System (EFTPS) in 2006 if:
● The total deposits of such taxes in 2004 were more than $200,000
or
● The corporation was required to use EFTPS in 2005.
If the corporation is required to use EFTPS and fails to do so, it
may be subject to a 10% penalty. If the corporation is not required
to use EFTPS, it may participate voluntarily. See IRS E-Services
Makes Taxes Easier above.
Depositing on time. For EFTPS deposits to be made timely, the
corporation must initiate the transaction at least 1 business day
before the date the deposit is due.
Deposits with Form 8109. If the corporation does not use EFTPS,
deposit corporation income tax payments (and estimated tax
payments) with Form 8109, Federal Tax Deposit Coupon. If you do not
have a preprinted Form 8109, use Form 8109-B to make deposits.
You can get this form only by calling 1-800-829-4933. Be sure to have
your employer identification number (EIN) ready when you call.
Do not send deposits directly to an IRS office; otherwise, the
corporation may have to pay a penalty. Mail or deliver the completed
Form 8109 with the payment to an authorized depositary (that is, a
commercial bank or other financial institution authorized to accept
Federal tax deposits). Make checks or money orders payable to the
depositary.
If the corporation prefers, it may mail the coupon and payment to:
Financial Agent, Federal Tax Deposit Processing, P.O. Box 970030,
St. Louis, MO 63197. Make the check or money order payable to
“Financial Agent.”
To help ensure proper crediting, enter the corporation’s EIN, the
tax period to which the deposit applies, and “Form 1120” on the
check or money order. Be sure to darken the “1120” box under
“Type of Tax” and the appropriate “Quarter” box under “Tax Period”
on the coupon. Records of these deposits will be sent to the IRS.
For more information, see “Marking the Proper Tax Period” in the
instructions for Form 8109.
For more information on deposits, see the instructions in the
coupon booklet (Form 8109) and Pub. 583, Starting a Business and
Keeping Records.

General Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
For tax years beginning after December 31, 2005, recent legislation
may impact your estimated tax.
New tax credits. For new credits that are effective for tax years
ending after December 31, 2005, see the instructions for the 2005
Form 1120, Schedule J. For information on new credits that take
effect for tax years beginning in 2006, see Pub. 553, Highlights of
2005 Tax Changes.
New deductions. These include the deduction for energy efficient
commercial building property under section 179D for assets placed
in service after 2005. Also see the instructions for the 2005 Form
1120.
Extraterritorial income (ETI) exclusion. Although the ETI exclusion
provisions were generally repealed for transactions after 2004,
certain transition rules apply for transactions during 2006. For
details, see the Instructions for Form 8873.
For more information, see Pub. 553, Highlights of 2005 Tax
Changes.

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 also 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 organizations subject to the unrelated business
income tax and private foundations use Form 990-W, Estimated Tax
on Unrelated Business Taxable Income for Tax-Exempt
Organizations, 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.

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.

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.

Specific Instructions
Line 1. Qualified Personal Service Corporations
A qualified personal service corporation is taxed at a flat rate of 35%
on taxable income. A corporation is a qualified personal service
corporation if it meets both of the following tests.
● Substantially all of the corporation’s activities involve the
performance of services in the fields of health, law, engineering,
architecture, accounting, actuarial science, performing arts, or
consulting.
● At least 95% of the corporation’s stock, by value, is owned,
directly or indirectly, by employees performing the services listed
above, retired employees who had performed such services, any
estate of an employee or retiree described above, or any person who
acquired the stock of the corporation as a result of the death of an
employee or retiree (but only for the 2-year period beginning on the
date of the employee’s or retiree’s death). See Temporary
Regulations section 1.448-1T(e) for details.

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 5 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1120-W (WORKSHEET) 2006

Page

Lines 2, 5, and 8. Members of a Controlled Group

Line 24. Installment Due Dates

Members of a controlled group enter on line 2 the smaller of (a) the
amount on line 1 or (b) their share of the $50,000 amount. On line 5,
enter the smaller of (a) the amount on line 4 or (b) their share of the
$25,000 amount. On line 8, enter the smaller of (a) the amount on
line 7 or (b) their share of the $9,925,000 amount.
Equal apportionment plan. If no apportionment plan is adopted,
members of a controlled group must divide the amount in each
taxable income bracket equally among themselves. For example,
Controlled Group AB consists of Corporation A and Corporation B.
They do not elect an apportionment plan. Therefore, each
corporation is entitled to:
● $25,000 (one-half of $50,000) on line 2,
● $12,500 (one-half of $25,000) on line 5, and
● $4,962,500 (one-half of $9,925,000) on line 8.
Unequal apportionment plan. Members of a controlled group can
elect an unequal apportionment plan and divide the taxable income
brackets as they want. There is no need for consistency among
taxable income brackets. Any member may be entitled to all, some,
or none of the taxable income bracket. However, the total amount
for all members cannot be more than the total amount in each
taxable income bracket.

Calendar-year taxpayers: Enter 4-17-2006, 6-15-2006, 9-15-2006,
and 12-15-2006, respectively, in columns (a) through (d).
Fiscal-year taxpayers: Enter the 15th day of the 4th, 6th, 9th, and 12th
months of your tax year in columns (a) through (d). If the due date falls
on a Saturday, Sunday, or legal holiday, enter the next business day.

Line 25. Required Installments

For information on tax credits the corporation can take, see the
instructions for Form 1120, Schedule J, lines 6a through 6f, (Form
1120-A, Part I, line 2), or the instructions for the applicable lines and
schedule of other income tax returns.

Payments of estimated tax should reflect any 2005 overpayment that
the corporation chose to credit against its 2006 tax. The
overpayment is credited against unpaid required installments in the
order in which the installments are required to be paid.
Annualized income installment method and/or adjusted seasonal
installment method. If the corporation’s income is expected to vary
during the year because, for example, it operates its business on a
seasonal basis, it may be able to lower the amount of one or more
required installments by using the annualized income installment
method and/or the adjusted seasonal installment method. For
example, a ski shop, which receives most of its income during the
winter months, may be able to benefit from using one or both of
these methods in figuring one or more of its required installments.
To use one or both of these methods, complete Schedule A on
pages 2 and 3. If Schedule A is used for any payment 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
(a) the annualized income installment (if applicable), (b) the adjusted
seasonal installment (if applicable), or (c) 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)).
Large corporations. A large corporation is a corporation that had,
or whose predecessor had, taxable income of $1 million or more for
any of the 3 tax years immediately preceding the 2006 tax year. For
this purpose, taxable income is modified to exclude net operating
loss and capital loss carrybacks or carryovers. Members of a
controlled group, as defined in section 1563, must divide the $1
million amount among themselves according to rules similar to those
in section 1561.
If Schedule A is not used, follow the instructions below to figure
the amounts to enter on line 25. If Schedule A is used, follow the
instructions below to figure the amounts to enter on line 35 of
Schedule A.
● If line 22 is smaller than line 23a: Enter 25% of line 22 in columns
(a) through (d) of line 25.
● If line 23a is smaller than line 22: Enter 25% of line 23a in column
(a) of line 25. In column (b), determine the amount to enter as
follows:
1. Subtract line 23a from line 22,
2. Add the result to the amount on line 22, and
3. Multiply the result in 2 above by 25% and enter the result in
column (b).
Enter 25% of line 22 in columns (c) and (d).

Line 19. Other Taxes

Schedule A

For information on other taxes the corporation may owe, see the
instructions for Form 1120, Schedule J, line 10, (Form 1120-A, Part I,
line 4), or the instructions for the applicable line and schedule of
other income tax returns.

If only the adjusted seasonal installment method (Part I) is used,
complete Parts I and III of Schedule A. If only the annualized income
installment method (Part II) is used, complete Parts II and III. If both
methods are used, complete all three parts. Enter in each column on
line 25, page 1, the amounts from the corresponding column of
line 38. If Schedule A is used for any payment date, it must be used
for all payment dates.

Line 12. Additional 5% Tax
Members of a controlled group are treated as one group to figure
the applicability of the additional 5% tax and the additional 3% tax.
If an additional tax applies, each member will pay that tax based on
the part of the amount used in each taxable income bracket to
reduce that member’s tax. See section 1561(a). Each member of the
group must enter on line 12 its share of the smaller of (a) 5% of the
taxable income in excess of $100,000 or (b) $11,750.

Line 13. Additional 3% Tax
If the additional 3% tax applies, each member of the controlled
group must enter on line 13 its share of the smaller of (a) 3% of the
taxable income in excess of $15 million or (b) $100,000. See the
instructions for line 12 above.

Line 15. Alternative Minimum Tax (AMT)
Note. Skip this line if the corporation is treated as a “small
corporation” exempt from the AMT under section 55(e).
AMT is generally the excess of tentative minimum tax (TMT) for the
tax year over the regular tax for the tax year. See section 55 for
definitions of TMT and regular tax. A limited amount of the foreign
tax credit, as refigured for the AMT, is allowed in computing the
TMT.

Line 17. Tax Credits

Line 21. Credit for Federal Tax Paid on Fuels
See Form 4136, Credit for Federal Tax Paid on Fuels, to find out if
the corporation qualifies to take this credit. Also include on line 21
any credit the corporation is claiming under section 4682(g)(2) for tax
on ozone-depleting chemicals.

CAUTION

Do not figure any required installment until after the end of
the month preceding the due date for that installment.

Line 23a. 2005 Tax

Part I. Adjusted Seasonal Installment Method

Figure the corporation’s 2005 tax in the same way that line 22 of this
worksheet was figured, using the taxes and credits from the 2005
income tax return. Large corporations, see the instructions for line 25
below.
If a return was not filed for the 2005 tax year showing a liability for
at least some amount of tax or the 2005 tax year was for less than
12 months, do not complete line 23a. Instead, skip line 23a and
enter the amount from line 22 on line 23b.

Complete this part only if the corporation’s base period percentage
for any 6 consecutive months of the tax year equals or exceeds
70% (.70). Figure the base period percentage using the 6-month
period in which the corporation normally receives the largest part of
its taxable income. 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 taxable income for each of their respective tax years.

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 1120-W, PAGE 6 of 6
PRINTS: HEAD TO HEAD
MARGINS: TOP 13mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 648mm (251⁄2 ") 279mm (11") FOLD TO 216mm (81⁄2 ") 279mm (11")
PERFORATE: ON FOLDS

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1120-W (WORKSHEET) 2006

Page

Example. An amusement park with a calendar year as its 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 2006, the amusement park
figures its taxable income for each May–October period in 2003,
2004, and 2005. It then divides the taxable income for each
May–October period by the total taxable income for that particular
tax year. The resulting percentages are 69% (.69) for May–October
2003, 74% (.74) for May–October 2004, and 67% (.67) for
May–October 2005. Because the average of 69%, 74%, and 67% is
70%, the base period percentage for May through October 2006 is
70%. Therefore, the amusement park qualifies for the adjusted
seasonal installment method.

Line 15. Alternative Minimum Tax
The corporation may owe AMT unless it will be a “small corporation”
exempt from the AMT under section 55(e) for its 2006 tax year. To
figure the AMT, use the 2005 Form 4626 and its instructions as a
guide. Figure alternative minimum taxable income (AMTI) using
income and deductions for the months shown in the column
headings above line 1. Divide the AMTI by the amounts on line 8
before subtracting the exemption amount. Multiply that result by
20% and subtract any AMT foreign tax credit plus the amount on
line 10 to arrive at the AMT. For columns (a) through (c), multiply the
AMT by the amount shown on line 13.

Line 16. Other Taxes
For the same taxes used to figure line 19 of Form 1120-W, figure the
amounts for the months shown in the column headings above line 1.

Line 18. Credits

Line 22. Annualization Amounts
Enter the annualization amounts for the option used on line 20. For
example, if the corporation elects Option 1, enter on line 22 the
annualization amounts 6, 3, 1.71429, and 1.2, in columns (a) through
(d), respectively.
1st
2nd
3rd
4th
Installment Installment Installment Installment

Standard option

Option 1

1.71429

Option 2

2.4

1.5

1.33333
1.2
1.09091

Line 25. Alternative Minimum Tax
The corporation may owe AMT unless it will be a “small corporation”
exempt from the AMT under section 55(e) for its 2006 tax year. To
figure the AMT, use the 2005 Form 4626 and its instructions as a
guide. Figure AMTI using income and deductions for the annualization
period entered in each column on line 20. Multiply the AMTI by the
annualization amounts on line 22 before subtracting the exemption
amount. Multiply that result by 20% and subtract any AMT foreign tax
credit plus the amount on line 24 to arrive at the AMT.

Line 26. Other Taxes
For the same taxes used to figure line 19 of Form 1120-W, figure the
amounts for the months shown on line 20.

Line 28. Credits

Part II. Annualized Income Installment Method

Enter the credits to which the corporation is entitled 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. For more details, see Rev. Rul.
79-179, 1979-1 C.B. 436.

Line 20. Annualization Periods

Part III. Required Installments

Enter in the space on line 20, columns (a) through (d), respectively,
the annualization periods that the corporation is using, based on the
options listed below. For example, if the corporation elects 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
use one of these options by filing Form 8842, Election To
Use Different Annualization Periods for Corporate
CAUTION
Estimated Tax, on or before the due date of the first
required installment payment. Once made, the election is irrevocable
for the particular tax year.

Line 33

Enter the credits to which the corporation is entitled for the months
shown in the column headings above line 1.

1st
2nd
3rd
4th
Installment Installment Installment Installment

Standard option

Option 1

Option 2

Line 21. Taxable Income
If a corporation has income includible under section 951(a)
(controlled foreign corporation income), special rules apply.
Amounts includible in income under section 951(a) generally must
be taken into account in figuring the amount of any annualized
income installment as the income is earned. The amounts are figured
in a manner similar to the way in which partnership income
inclusions are taken into account in figuring a partner’s annualized
income installments as provided in Regulations section
1.6654-2(d)(2).
Safe harbor election. Corporations may be able to elect a prior year
safe harbor election. Under the election, an eligible corporation is
treated as having received ratably during the tax year items of
income under section 951(a) equal to a specified percentage of the
amounts shown on the corporation’s return for the first preceding tax
year (the second preceding tax year for the first and second required
installments).
For more information, see section 6655(e)(4) and Rev. Proc. 95-23,
1995-1 C.B. 693.

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 38. Required Installments
For each installment, enter the smaller of line 34 or line 37 on line
38. Also enter the result on line 25, page 1.
Paperwork Reduction Act Notice. Your use of this form is optional.
It is provided to aid the corporation in determining its tax liability.
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
may 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 this form will vary depending on
individual circumstances. The estimated average time is:
Form
Recordkeeping
8 hr., 7 min.
1120-W
1120-W, Sch. A (Pt. I)
22 hr., 43 min.
10 hr., 31 min.
1120-W, Sch. A (Pt. II)
1120-W, Sch. A (Pt. III)
6 hr., 13 min.

Learning about the
law or the form
1 hr.
6 min.
35 min.

Preparing
the form
1 hr., 10 min.
28 min.
48 min.
6 min.

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. You can write to the Internal Revenue
Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP,
1111 Constitution Ave. NW, IR-6406, Washington, DC 20224. Do not
send the tax form to this office. Instead, keep the form for your
records.

File Type	application/pdf
File Title	2006 Form 1120-W
Subject	Estimated Tax for Corporations
Author	SE:W:CAR:MP
File Modified	2006-07-21
File Created	2005-12-06