U.S. Individual Income Tax Return

2007 Instructions for Form 2210
Purpose: This is the first circulation draft of the 2007 Instructions for Form 2210 for
your review and comments. See below for a discussion of the major changes.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: The 2006 instructions for Form 2210 are available at:
http://www.irs.gov/pub/irs-pdf/i2210.pdf
Form: The 2007 Form 2210 was circulated earlier at:
http://taxforms.web.irs.gov/Products/Drafts/2007-2/07f2210_d1.pdf
Other Products: Circulation of draft tax forms, instructions, notices, and
publications are posted at: http://taxforms.web.irs.gov/draft_products.html
Comments: Please email, fax or call with any comments by October 4, 2007. Also
please copy Judy Pohlmann, (Reviewer) at [email protected].
Shirley A.E. White - TLS
Tax Forms & Publications Rm. 6423
SE:W:CAR:MP:T:I:F
[email protected]
(202) 622-3147 Phone
(202-927-6234 Fax
Major Changes for 2007 Instructions for Form 2210
Underpayment of Estimated Tax by Individuals, Estates, and Trusts
Note. All text relating to relief for victims of Hurricane Rita and Hurricane Wilma has
been deleted because it does not apply for 2007.
Years were updated to reflect 2006, 2007, and 2008 as appropriate.
Page 1
• What’s New was deleted, but will be added if there are changes in the law for
2007.
Page 2
• Part III—Short Method, Line 15 instructions were eliminated as they only
pertained to Katrina rate change which has expired. Notice 2006-20, IR 2006135, and CC:PA:APJP:2.
Page 3
• An example was added to Section A, Line 19, clarifying the application of
2007 federal withholding and overpayment from 2006.

• Instructions for Table 1 and Table 2 were added to include overpayments
from 2006 return and payment with 2007 return.
• The Chart of Total Days was updated to reflect 2 rate periods. Note: rate is
not yet known for the 1st quarter 2008 so these may require revision in later
drafts.
• A TIP was added after the Chart of Total Days advising taxpayers to consult
Table 4-1 (Pub. 505) when payments are made during a rate period.
Page 4
• Instructions and examples were updated to clarify Line 28 The rate was
updated for the first rate period to .08. (Rev. Rul. 2007-16, 2007-39, and
2007-56)
• Illustrations were created to show how multiple dates and payments can be
placed on the form under Section B.
• Under Line 30, “366” was placed as the divisor as 2008 is a leap year.
Penalty rate is still unknown.
Page 5
• The inflationary adjustments and exemption amount for the Line 6 and Line 10
instructions and the Itemized Deductions Worksheet— Lines 6 and Deduction
for Exemptions Worksheet—Line 10 have been updated. (Rev. Proc. 2006-53,
Sec. 3.12 and 3.18.)

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Instructions for Form 2210

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2007

Department of the Treasury
Internal Revenue Service

Instructions for Form 2210
Underpayment of Estimated Tax by Individuals, Estates, and Trusts
Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
Purpose of Form
Generally, use Form 2210 to see if you
owe a penalty for underpaying your
estimated tax and, if you do, to figure the
amount of the penalty. If you are not
required to file Form 2210, you can use it
to figure your penalty if you wish to do so.
In that case, enter the penalty on your
return, but do not file Form 2210.

Who Must File
Form 2210
In most cases, you do not need to file
Form 2210. The IRS will figure any
penalty you owe and send you a bill. See
The IRS Will Figure the Penalty for You,
below. Use the chart at the top of page 1
of Form 2210 to see if you need to file
Form 2210.

The IRS Will Figure the
Penalty for You
Because Form 2210 is complicated, we
strongly encourage you to let the IRS
figure the penalty. If you owe it, we will
send you a bill. If you file your return by
April 15, 2008, we will not charge you
interest on the penalty if you pay by the
date specified on the bill.
If you want us to figure the penalty for
you, complete your return as usual. Leave
the penalty line on your return blank; do
not file Form 2210.
See Part II of the form. If box B, C,
or D is checked, you must figure
CAUTION the penalty yourself and attach a
completed Form 2210 to your return.

!

Other Methods of Figuring
the Penalty
We realize that there are different ways to
figure the correct penalty. You do not
have to use the method used on Form
2210 as long as you enter the correct
penalty amount on the penalty line of your
return.
However, if you are required to file
Form 2210 because one or more of the
boxes in Part II applies to you, you must
complete certain lines.
• If you use the short method, check the
applicable boxes in Part II, complete lines
1 through 14, and enter the penalty on
line 17.

• If you use the regular method, check
the applicable boxes in Part II, complete
lines 1 through 9 and lines 18 through 26,
and enter the penalty on line 31.
• If you use the annualized income
installment method, check the applicable
boxes in Part II, complete lines 1 through
9, Schedule AI, and lines 18 through 26,
and enter the penalty on line 31.

Who Must Pay the
Underpayment Penalty
In general, you may owe the penalty for
2007 if you did not pay at least the
smaller of:
• 90% of the tax shown on your 2007 tax
return, or
• 100% of the tax shown on your 2006
tax return (110% of that amount if you are
not a farmer or fisherman and the
adjusted gross income (AGI) shown on
that return is more than $150,000, or, if
married filing separately for 2007, more
than $75,000).
The penalty is figured separately for
each installment due date. Therefore, you
may owe the penalty for an earlier due
date even if you paid enough tax later to
make up the underpayment. This is true
even if you are due a refund when you file
your tax return. However, you may be
able to reduce or eliminate the penalty by
using the annualized income installment
method. For details, see the Schedule AI
instructions beginning on page 4.
Return. In these instructions, “return”
refers to your original return. However, an
amended return is considered the original
return if it is filed by the due date
(including extensions) of the original
return. Also, a joint return that replaces
previously filed separate returns is
considered the original return.

Exceptions to the Penalty
You will not have to pay the penalty if
either (1) or (2) applies.
1. You had no tax liability for 2006,
you were a U.S. citizen or resident alien
for the entire year (or an estate of a
domestic decedent or a domestic trust),
and your 2006 tax return was (or would
have been had you been required to file)
for a full 12 months.
2. The total tax shown on your 2007
return minus the amount of tax you paid
through withholding is less than $1,000.
To determine whether the total tax is less
than $1,000, complete lines 1 – 7.
Estates and trusts. No penalty applies
to either of the following.
Cat. No. 63610I

• A decedent’s estate for any tax year
ending before the date that is 2 years
after the decedent’s death.
• A trust that was treated as owned by
the decedent if the trust will receive the
residue of the decedent’s estate under
the will (or if no will is admitted to probate,
the trust primarily responsible for paying
debts, taxes, and expenses of
administration) for any tax year ending
before the date that is 2 years after the
decedent’s death.

Special Rules for Farmers and
Fishermen
If you meet both tests 1 and 2 below, you
do not owe a penalty for underpaying
estimated tax.
1. Your gross income from farming
and fishing is at least two-thirds of your
annual gross income from all sources for
2006 or 2007.
2. You filed Form 1040 or 1041 and
paid the entire tax due by March 3, 2008.
See chapter 2 of Pub. 505, Tax
Withholding and Estimated Tax, for the
definition of gross income from farming
and fishing.
If you meet test 1 but not test 2, use
Form 2210-F, Underpayment of
Estimated Tax by Farmers and
Fishermen, to see if you owe a penalty. If
you do not meet test 1, use Form 2210.

Waiver of Penalty
If you have an underpayment, all or part
of the penalty for that underpayment will
be waived if the IRS determines that:
• In 2006 or 2007, you retired after
reaching age 62 or became disabled, and
your underpayment was due to
reasonable cause, or
• The underpayment was due to a
casualty, disaster, or other unusual
circumstance, and it would be inequitable
to impose the penalty.
If requesting a waiver, do the
following.
• Check box A or box B in Part II.
• If you checked box A, complete only
page 1 of Form 2210 and attach it to your
tax return (you are not required to figure
the amount of penalty to be waived).
• If you checked box B, complete
Form 2210 through line 16 (line 30 if you
use the regular method) without regard to
the waiver. Enter the amount you want
waived in parentheses on the dotted line
next to line 17 (line 31 for the regular
method). Subtract this amount from the
total penalty you figured without regard to

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Instructions for Form 2210

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the waiver, and enter the result on line 17
(line 31 for the regular method).
• Attach Form 2210 and a statement to
your return explaining the reasons you
were unable to meet the estimated tax
requirements and the time period for
which you are requesting a waiver.
• If you are requesting a waiver due to
retirement or disability, attach
documentation that shows your retirement
date (and your age on that date) or the
date you became disabled.
• If you are requesting a waiver due to a
casualty, disaster, or other unusual
circumstance, attach documentation such
as copies of police and insurance
company reports.
The IRS will review the information you
provide and decide whether to grant your
request for a waiver.

Additional Information
See Pub. 505, chapter 4, for more details
and examples of filled-in Forms 2210.
For guidance on figuring estimated
taxes for trusts and certain estates, see
Notice 87-32, 1987-1 C.B. 477.

Specific Instructions
Part I—Required Annual
Payment
Complete lines 1 – 9 to figure your
required annual payment.
If you file an amended return by the
due date of your original return, use the
amounts shown on your amended return
to figure your underpayment. If you file an
amended return after the due date, use
the amounts shown on the original return.
Exception. If you and your spouse file a
joint return after the due date to replace
previously filed separate returns, use the
amounts shown on the joint return to
figure your underpayment.

Line 1
Enter the amount from Form 1040,
line 57; Form 1040A, line 35;
Form 1040NR, line 52; or
Form 1040NR-EZ, line 15. For an estate
or trust, enter the amount from Form
1041, Schedule G, line 4.

Line 2
Enter the total of the following amounts
on line 2.
• Self-employment tax.
• Tax from recapture of investment
credit, low-income housing credit,
qualified electric vehicle credit, Indian
employment credit, new markets credit, or
credit for employer-provided childcare
facilities.
• Tax on early distributions from (a) an
IRA or other qualified retirement plan, (b)
an annuity, or (c) a modified endowment
contract entered into after June 20, 1988.
• Tax on distributions from a Coverdell
education savings account or a qualified

tuition program not used for qualified
education expenses.
• Tax on Archer MSA, Medicare
Advantage MSA, or health savings
account distributions not used for
qualified medical expenses.
• Section 72(m)(5) excess benefits tax.
• Advance earned income credit
payments.
• Tax on accumulation distribution of
trusts.
• Interest due under sections 453(l)(3)
and 453A(c) on certain installment sales
of property.
• An increase or decrease in tax as a
shareholder in a qualified electing fund.
• Tax on electing small business trusts
included on Form 1041, Schedule G,
line 7.
• Tax on income not effectively
connected with a U.S. trade or business
from Form 1040NR, lines 53 and 56.
• Additional tax on income you received
from a nonqualified deferred
compensation plan that fails to meet
certain requirements.
• Household employment taxes, before
subtracting any advance EIC payments
made to your employees. Do not include
this amount if you will enter -0- on Form
2210, line 6, and the amount on line 4
(excluding household employment taxes)
would be less than $1,000.

Line 6
Enter the taxes withheld from
Form 1040, lines 64 and 67; Form 1040A,
line 38, plus any withheld amount written
in on line 42; Form 1040NR, lines 59, 61,
66, 67, and 68; or Form 1040NR-EZ, line
18. For an estate or trust, enter the
amount from Form 1041, line 24e.

Line 8
Enter the tax shown on your 2006 tax
return (110% of that amount if the
adjusted gross income shown on that
return is more than $150,000, or, if
married filing separately for 2007, more
than $75,000). Figure your 2006 tax using
the taxes and credits shown on your 2006
tax return. Use the same type of taxes
and credits as shown on lines 1, 2, and 3
of this Form 2210.
If you are filing a joint return for 2007,
but you did not file a joint return for 2006,
add the tax shown on your 2006 return to
the tax shown on your spouse’s 2006
return and enter the total on line 8
(figured as explained above).
If you filed a joint return for 2006 but
you are not filing a joint return for 2007,
see Pub. 505, chapter 4, General Rule, to
figure your share of the 2006 tax to enter
on line 8.
If you did not file a return for 2006 or
your 2006 tax year was less than 12
months, do not complete line 8. Instead,
enter the amount from line 5 on line 9.
However, see Exceptions to the Penalty
on page 1.

-2-

Part III—Short Method
If you can use the short method (see
Form 2210 for qualifications), complete
lines 10 – 14 to figure your total
underpayment for the year, and lines
15 – 17 to figure the penalty.
In certain circumstances, the IRS will
waive all or part of the underpayment
penalty. See Waiver of Penalty beginning
on page 1.

Line 12
If you are a household employer and
made advance EIC payments, include
those payments as estimated tax
payments as of the date you paid the
wages to your employees.

Part IV—Regular Method
Use the regular method if you are not
eligible to use the short method.
Form 1040NR or 1040NR-EZ filers. If
you are filing Form 1040NR or
1040NR-EZ and did not receive wages as
an employee subject to U.S. income tax
withholding, the instructions for
completing Part IV are modified as
follows.
1. Skip column (a).
2. In line 18, column (b), enter
one-half of the amount on line 9 of Part I
(unless you are using the annualized
income installment method).
3. In line 19, column (b), enter the
total tax payments made through June
15, 2007, for the 2007 tax year. If you are
treating federal income tax (and excess
social security or tier 1 railroad retirement
tax) as having been withheld evenly
throughout the year, you are considered
to have paid one-third of these amounts
on each payment due date.
4. Skip all lines in column (b) that are
shaded in column (a).

Section A—Figure Your
Underpayment
Line 18
Enter on line 18, columns (a)−(d), the
amount of your required installment for
the due date shown in each column
heading. For most taxpayers, this is
one-fourth of the required annual
payment shown on Part I, line 9.
However, it may be to your benefit to
figure your required installments by using
the annualized income installment
method. See the Schedule AI instructions
beginning on page 4.

Line 19
Enter the estimated tax payments you
made for the 2007 tax year, plus any
federal income tax and excess social
security and tier 1 railroad retirement tax
withheld. If you are a household employer
and made advance EIC payments,
include those payments as estimated tax
payments as of the date you paid the
wages to your employees.

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Instructions for Form 2210

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In column (a), enter the tax payments
you made by April 15, 2007; in column
(b), enter payments you made after April
15 through June 15, 2007; in column (c),
enter payments you made after June 15
through September 15, 2007; and in
column (d), enter payments you made
after September 15, 2007, through
January 15, 2008.
When figuring your payment dates and
the amounts to enter on line 19 of each
column, apply the following rules.
• For withheld federal income tax and
excess social security or tier 1 railroad
retirement tax, you are considered to
have paid one-fourth of these amounts on
each payment due date unless you can
show otherwise.
If you treat withholding as paid for
estimated tax purposes when it
CAUTION was actually withheld, you must
check box D in Part II and complete and
attach Form 2210 to your return.

!

• Include in your estimated tax payments
any overpayment of tax from your 2006
tax return that you elected to apply to
your 2007 estimated tax. If you file your
return by the due date, treat the
overpayment as a payment made on April
15, 2007. Payments made after the due
date (not including extensions) are
treated as made on the date of payment.
Example 1. You had federal income
tax of $4,000 withheld from your wages
during 2007 and elected to have the
$1,000 overpayment from your 2006
return applied to your estimated tax
payment. On line 19, you would enter
$2,000, ($1,000 withholding + $1,000
overpayment) in column (a), and $1,000
(withholding) in columns (b), (c) and (d).

• If you file your return and pay the tax

due by January 31, 2008, include on line
19, column (d), the amount of tax you pay
with your tax return. In this case, you will
not owe a penalty for the payment due on
January 15, 2008.
• If you paid estimated tax on April 16 or
17, 2007, it is considered paid on April 15,
2007.
• If you paid estimated tax on September
16 or 17, 2007, it is considered paid on
September 15, 2007, to the extent it is
applied to the third required installment.

Line 25
If line 25 is zero for all payment periods,
you do not owe a penalty. But if you
checked box C or D in Part II, you must
file Form 2210 with your return. If you
checked box E, you must file page 1 of
Form 2210 with your return.

Section B—Figure the Penalty

Table 2
Payments after 12/31/07 through 4/15/08

Before completing Section B, read
the following instructions through
CAUTION line 30, including Example 2
through Example 9.

!

Figure the penalty for each period by
applying the appropriate rate against
each underpayment shown on line 25.
The penalty is figured for the number of
days that the underpayment remained
unpaid.
The rates are established at various
times throughout the year. For the period
covered by the 2007 Form 2210, there
were two rates in effect over two rate
periods. If an underpayment remained
unpaid for more than one rate period, the
penalty on that underpayment will be
figured using more than one rate.
Use lines 27 and 29 to figure the
number of days the underpayment
remained unpaid. Use lines 28 and 30 to
figure the actual penalty amount by
applying the rate to the underpayment for
the number of days it remained unpaid.
Your payments are applied first to any
underpayment balance on an earlier
installment. It does not matter if you
designate a payment for a later period.
Example 2. You had a $500
underpayment for the April 15 installment.
The June 15 installment required a
payment of $1,200. On June 10, you
made a payment of $1,200 to cover the
June 15 installment. However, $500 of
this payment is applied first to the April 15
installment. The penalty for the April 15
installment is figured to June 10 (56
days). The amount applied to the June 15
installment is $700.
List your payments made after 4/15/07.
Before figuring your penalty in Section B,
it will be helpful to list the payments you
made after April 15, 2007, in the following
tables.
In each table, list only the payments
made during the dates shown in the table
heading. Follow the instructions under
Line 19 to determine the date of payment.
In Table 1, list any overpayment from
your 2006 return applied to your 2007
estimated tax payments as paid on
4/15/07. List any payment made on a
balance due for your 2007 return on
Table 2. Use the date you filed your
return or 4/15/08, whichever is earlier, as
the payment date.
Table 1
Payments after 4/15/07 through 12/31/07

Date

Payments

In certain circumstances, the IRS will
waive all or part of the underpayment
penalty. See Waiver of Penalty beginning
on page 1.

-3-

Date

Payments

Total days per rate period. If an
underpayment remained unpaid for an
entire rate period, use the chart below to
determine the number of days to enter in
each column. The chart is organized in
the same format as Form 2210, Part IV,
Section B.
Chart of Total Days
Rate Period

(a)

(b)

(c)

(d)

1 (Line 27)

260

199

107

—

2 (Line 29)

105

105

105

90

For example, if you have an
underpayment on line 25, column (a), but
show no payments in Table 1, you would
enter “260” on line 27, column (a).
When you make a payment during

TIP a rate period, see Table 4-1 (Pub.
505, chapter 4) for an easy way to
figure the number of days the payment is
late.

Rate Period 1
First, complete Section B, column (a)
lines 27 through 30, for an underpayment
shown on line 25, column (a). If there is
also an underpayment shown in column
(b), (c), or (d) on line 25, then complete
lines 27 through 30 for those columns in a
similar manner.

Line 27
Enter on line 27, column (a), the number
of days from 4/15/07 to the date of the
first payment listed in Table 1. If no
payments are listed, enter “260” (see the
Chart of Total Days, above).
Example 3. You had an
underpayment of $5,000 on line 25,
column (a), and your first payment shown
in Table 1 was made on 4/30/07 in the
amount of $3,000. Enter “15” (number of
days from 4/15 to 4/30) on line 27,
column (a).

Line 28
Make the computation requested on line
28 and enter the result. The amount you
use as the “underpayment” on line 25
depends on whether any payments are
listed in Table 1. See the instructions
below and the examples in chapter 4 of
Pub. 505.
If there are payments listed in Table 1.
On a separate sheet of paper, apply the
first payment to the underpayment shown
on line 25, column (a). The
“underpayment” for the computation on
line 28 is the amount of payment applied
to the line 25, column (a), underpayment.

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Instructions for Form 2210

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If the first payment is not enough to
reduce the column (a) underpayment to
zero, see condition 4 and Example 7 on
this page. If the payment is more than the
underpayment, apply only an amount
equal to the underpayment and use that
amount for the line 28 computation.
Example 4. Your underpayment on
line 25 was $4,000. You paid $4,000 on
6/20/07. Enter $57.86 on line 28 ($4,000
× (66 ÷ 365) × .08).
Example 5. Your underpayment on
line 25 was $5,000 and you paid $8,000
on 4/30/07. Because your payment was
more than your underpayment, you apply
$5,000 to the underpayment. Enter
$16.44 on line 28 ($5,000 × (15 ÷ 365) ×
.08).
If there are no payments listed in
Table 1. The “underpayment” is the
entire underpayment balance, which
equals the amount on line 25, column (a).

Determine if You Need To Make
Additional Computations for
Column (a)
Whether you need to make additional
computations depends on which of the
following four conditions applies to you.
1. The first (or only) payment listed
in Table 1 was enough to reduce the
underpayment to zero. There are no
further computations to make for column
(a). Figure the penalty for any other
underpayments shown in columns (b) – (d)
of line 25.
2. No payments are listed in
Table 1. Figure the penalty in column (a)
for the next rate period. See Rate Period
2 on this page.
3. Only one payment is listed in
Table 1 and it did not reduce the
underpayment to zero. Make one more
computation for column (a) on lines 27
and 28. This second computation is to
figure the penalty on the underpayment
balance; that is, the portion of the
underpayment that remained unpaid for
the entire period. In this case, enter
another number in the entry space for
lines 27 and 28, as follows.
a. On line 27, enter “260,” the total
number of days in the period. See Total
days per rate period on page 3.
b. On line 28, make the computation
and enter the result. In this case,
however, the “underpayment” in the
computation is the remaining balance of
the underpayment.
c. Go to line 29 to figure the penalty
on the underpayment balance for Rate
Period 2.
Example 6. Assume the same facts
as in Example 3 (see page 3), with
$3,000 being the only payment listed in
Table 1. After applying the $3,000
payment, the underpayment balance is
$2,000. On line 27, enter “15” and “260”
to reflect the number of days from 4/15 to
the $3,000 payment (4/30) and the
number of days to the end of the rate
period. On line 28, enter the penalty for
each underpayment:

$9.86 ($3,000 × (15 ÷ 365) × .08) and
$113.97 ($2,000 × (260 ÷ 365) × .08).
4/15/07
Days:
15

Line 29

260

27
9.86
28

113.97

$

4. Additional payments are listed in
Table 1 and the first payment was not
enough to reduce the underpayment to
zero. On line 25, it is helpful to list the
amounts and the payment dates that
apply to the underpayment for that
installment period. Then figure the penalty
for each amount listed on line 25. See
Example 7 below.
If an underpayment balance remains
after applying all the payments, figure the
penalty on the balance of the
underpayments for the entire period. See
Example 8 below.
Example 7. Your underpayment on
line 25, column (a), is $6,000 and you
made two payments: $3,500 on 4/30/07
and $2,500 on 6/1/07. On line 25, you can
enter $6,000 or enter each payment and
date separately, which will correspond
with the two entries on lines 27 and 28
(see illustration below). Because the
underpayment was paid with two
payments on two different dates, you
figure the penalty for each payment
separately:
$11.51 ($3,500 × (15 ÷ 365) × .08) and
$25.75 ($2,500 × (47 ÷ 365) × .08).
4/15/07
Days:
15
47

27
4/30
6/1

25

3,500
2,500

6,000

lines 29 and 30. Generally, use the same
steps as explained under the instructions
for Rate Period 1. But use the dates and
interest rate shown on lines 29 and 30
and the payments listed in Table 2.

11.51
28

$

25.75

Example 8. Your underpayment on
line 25, column (a), is $8,000 and you
made two payments: $3,000 on 4/30/07
and $4,000 on 6/22/07. Lines 27 and 28
will each show three entries in column (a),
one for each payment and a third for the
underpayment balance of $1,000 ($8,000
− $7,000).
Line 27 will show “15” days (from
4/15 to 4/30), “68” days (from 4/15 to
6/22), and “260” days (from 4/15 to
12/31).
Line 28 will show $9.86, $59.62, and
$56.99, computed as follows:
($3,000 (first payment) × (15 ÷ 365) ×
.08), ($4,000 (second payment) × (68 ÷
365) × .08), and ($1,000 (remaining
underpayment) × (76 ÷ 365) × .08).
Then figure the penalty for Rate Period
2 (lines 29 and 30) on the remaining
$1,000.

Rate Period 2
If an underpayment balance remains after
applying any payments in Table 1, figure
the penalty attributable to that balance on

-4-

Enter on line 29, column (a), the number
of days from 12/31/07 to the date of the
first payment listed in Table 2. If no
payments are listed in Table 2, enter
“105.”

Line 30
Figure line 30 in the same manner as line
28.
Example 9. Assume the same facts
as in Example 8. The return was filed and
full paid 4/15/08.
Enter “105” on line 29, column (a).
Enter $XX.XX on line 30 ($1,000 × (105 ÷
366) × .XX).

Schedule AI—Annualized
Income Installment Method
If your income varied during the year
because, for example, you operated your
business on a seasonal basis, you may
be able to lower or eliminate the amount
of one or more required installments by
using the annualized income installment
method. Use Schedule AI to figure the
required installments to enter on Form
2210, Part IV, line 18.
If you use Schedule AI for any
payment due date, you must use it for all
payment due dates. To figure the amount
of each required installment, Schedule AI
automatically selects the smaller of the
annualized income installment or the
regular installment (that has been
increased by the amount saved by using
the annualized income installment
method in figuring any earlier
installments).
To use the annualized income
installment method, you must do all of the
following.
1. Complete Schedule AI, Part I (and
II, if necessary). Enter the amounts from
Schedule Al, line 25, columns (a) – (d), in
the corresponding columns of Form 2210,
Part IV, line 18.
2. Complete Part IV to figure the
penalty.
3. Check box C in Part II.
4. Attach both Form 2210 and
Schedule AI to your return.
Additional information. See Pub. 505,
chapter 4, for more details about the
annualized income installment method
and a completed example. Estates and
trusts with short tax years, see Notice
87-32.
Form 1040NR or 1040NR-EZ filers. If
you are filing Form 1040NR or
1040NR-EZ and you did not receive
wages as an employee subject to U.S.
income tax withholding, follow these
modified instructions for Schedule AI.
1. Skip column (a).

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Instructions for Form 2210

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2. Enter on line 1 your income for the
period that is effectively connected with a
U.S. trade or business.
3. Increase the amount on line 17 by
the amount determined by multiplying
your income for the period that is not
effectively connected with a U.S. trade or
business by the following.
• In column (b), 72%.
• In column (c), 45%.
• In column (d), 30%.
However, if you can use a treaty rate
lower than 30%, use the percentages
determined by multiplying your treaty rate
by 2.4, 1.5, and 1, respectively.
4. Enter in line 22, column (b),
one-half of the amount from Form 2210,
Part I, line 9. In columns (c) and (d), enter
one-fourth of that amount.
5. Skip column (b), lines 20 and 23.

Part I—Annualized Income
Installments
Line 1
For each period (column), figure your total
income minus your adjustments to
income. Include your share of partnership
or S corporation income or loss items for
the period.
If you are self-employed, be sure to
take into account the deduction for
one-half of your self-employment tax. To
figure this amount for each period,
complete Schedule AI, Part II, and divide
the amount in columns (a) – (d) on line 34
by 8, 4.8, 3, and 2, respectively.

Line 2
Estates and trusts, do not use the
amounts shown in columns (a) – (d).
Instead, use 6, 3, 1.71429, and 1.09091,
respectively, as the annualization
amounts.

Line 6
If you itemized your deductions, multiply
line 4 of each column by line 5 and enter
the result on line 6. But if line 3 is more
than $156,400 ($78,200 if married filing
separately), use the worksheet on this
page to figure the amount to enter on line
6. Complete the worksheet for each
period, as necessary.

Itemized Deductions Worksheet —Line 6
1. Enter the amount from Schedule AI, line 4 . . . . . . . . . . . . . . .

1.

2. Enter the amount included in line 1 for medical and dental
expenses, investment interest, casualty or theft losses, and
gambling losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Enter the number given on Schedule AI, line 5 . . . . . . . . . . . .

4.

5. Multiply line 1 by line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note. If the amount on line 3 is zero, stop here and enter the
amount from line 5 on Schedule AI, line 6.

5.

6. Multiply line 3 by line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Multiply line 6 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Enter the amount from Schedule AI, line 3 . . . . . . . . . . . . . . .

8.

9. Enter $156,400 ($78,200 if married filing separately) . . . . . . . .

9.

10. Subtract line 9 from line 8 . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Multiply line 10 by 3% (.03) . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Enter the smaller of line 7 or line 11 . . . . . . . . . . . . . . . . . . .

12.

13. Divide line 12 by 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

14. Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Subtract line 14 from line 5. Enter the result here and on
Schedule AI, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

Deduction for Exemptions Worksheet —Line 10
1. Multiply $3,400 by the number of exemptions you plan to claim

1.

2. Enter the amount from Schedule AI, line 3 . . . . . . . . . . . . . . .

2.

3. Enter the amount shown below for your filing status
Single — $156,400
Married filing jointly or qualifying widow(er) — $234,600
Married filing separately — $117,300
Head of household — $195,500 . . . . . . . . . . . . . . . . . . . . .

3.

4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Is line 4 more than $122,500 (more than $61,250 if married filing
separately)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yes. Multiply $1,133 by the number of exemptions you
claimed and enter the result here and on Schedule AI, line
10. Do not complete the rest of this worksheet.
No. Divide line 4 by $2,500 ($1,250 if married filing
separately). If the result is not a whole number, increase it to
the next whole number (for example, increase 0.0004 to 1)

5.

Line 10

6. Multiply line 5 by 2% (.02). Enter the result as a decimal . . . . . .

6.

For each column, multiply $3,400 by your
total exemptions. But if line 3 is more than
the amount shown below for your filing
status, use the worksheet on this page to
figure the amount to enter on line 10.

7. Multiply line 1 by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Divide line 7 by 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Subtract line 8 from line 1. Enter the result here and on
Schedule AI, line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.

Single . . . . . . . . . . . . . .
Married filing jointly or
qualifying widow(er) . . . .
Married filing separately
Head of household . . . . .

.

$156,400
$234,600
$117,300
$195,500

Line 12
To compute the tax, use the Tax Table,
Tax Computation Worksheet, Qualified
Dividends and Capital Gain Tax
Worksheet (see note), Schedule D Tax
Worksheet, Foreign Earned Income Tax

Worksheet (see note) Schedule J, or
Form 8615.
Note. If you need to compute tax using
the Qualified Dividends and Capital Gains
Tax Worksheet or the Foreign Earned
Income Tax Worksheet, use the
appropriate worksheet in Pub. 505,
chapter 4.

-5-

Line 14
Enter all of the other taxes you owed
because of events that occurred during
the months shown in the column
headings. Include the same taxes used to
figure Form 2210, Part I, line 2 (except
self-employment tax), plus the tax from
Form 4972, Tax on Lump-Sum
Distributions, and any alternative
minimum tax (AMT).

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Instructions for Form 2210

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

To figure the AMT, individuals use
Form 6251, Alternative Minimum Tax —
Individuals; estates and trusts use
Schedule I of Form 1041. Figure
alternative minimum taxable income
based on your income and deductions
during the periods shown in the column
headings. Multiply this amount by the
annualization amounts shown for each
column on Schedule AI, line 2, before
subtracting the AMT exemption.

Line 16
For each column, enter the credits you
are entitled to because of events that
occurred during the months shown in the
column headings. These are the credits
you used to arrive at the amounts on lines
1 and 3 of Part I, Required Annual
Payment.
When figuring your credits, annualize
any item of income or deduction used to
figure each credit. For example, if your
earned income (and AGI) for the first
period (column (a)) is $8,000 and you
qualify for the earned income credit (EIC),
use your annualized earned income
($32,000) to figure your EIC for column
(a). See the example under Completing
Schedule AI, in chapter 4 of Pub. 505.

Part II—Annualized
Self-Employment Tax
If you had net earnings from
self-employment during any period,

complete Part II for that period to figure
your annualized self-employment tax.
If you are married and filing a joint
return and both you and your spouse had
net earnings from self-employment,
complete a separate Part II for each
spouse. Enter on line 13 the combined
amounts from line 34 of both Parts II.

Line 26

The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated burden for
individual taxpayers filing this form is
approved under OMB control number
1545-0074 and is included in the
estimates shown in the instructions for
their individual income tax return. The
estimated burden for all other taxpayers
who file this form is shown below.

To figure your net earnings from
self-employment on line 26, multiply your
net profit from all trades or businesses for
each period by 92.35% (.9235).
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 may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.

-6-

Short
Method

Regular
Method

Recordkeeping

13 min.

13 min.

Learning about
the law or the
form . . . . . . . . .

15 min.

31 min.

Preparing the
form . . . . . . . . .

32 min.

2 hr., 2 min.

Copying,
assembling, and
sending the form
to the IRS . . . . .

16 min.

41 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. See
the instructions for the tax return with
which this form is filed.