Estimated Tax for Corporations

2013

Department of the Treasury
Internal Revenue Service

Instructions for
Form 1120-W
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments
For the latest information about developments affecting Form
1120-W and its instructions, such as legislation enacted after
they were published, go to www.irs.gov/form1120.

General Instructions
Who Must Make Estimated Tax
Payments

Corporations generally must make estimated tax payments if
they expect their estimated tax (income tax less credits) to be
$500 or more.
S corporations must make estimated tax payments for certain
taxes. S corporations should see the Instructions for Form
1120S, U.S. Income Tax Return for an S Corporation, to figure
their estimated tax payments.
Tax-exempt corporations, tax-exempt trusts, and domestic
private foundations must make estimated tax payments for
certain taxes. These entities should see the instructions for their
tax return, to figure the amount of their estimated tax payments.

When To Make Estimated Tax
Payments

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

Underpayment of Estimated Tax

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

Overpayment of Estimated Tax

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

Methods of Tax Payment

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

Electronic Deposit Requirement

Corporations must use electronic funds transfers to make all
federal tax deposits (such as deposits of employment, excise,
and corporate income tax). This includes installment payments
of estimated tax. Generally, electronic funds transfers are made
using the Electronic Federal Tax Payment System (EFTPS).
However, if the corporation does not want to use EFTPS, it can
arrange for its tax professional, financial institution, payroll
service, or other trusted third party to make deposits on its
behalf. Also, it may arrange for its financial institution to initiate a
same-day tax wire payment (discussed below) on its behalf.
EFTPS is a free service provided by the Department of the
Treasury. Services provided by a tax professional, financial
institution, payroll service, or other third party may have a fee.
To get more information about EFTPS or to enroll in EFTPS,
visit www.eftps.gov or call 1-800-555-4477. Additional
information about EFTPS is also available in Pub. 966, The
Secure Way to Pay Your Federal Taxes.
Depositing on time. For deposits made by EFTPS to be on
time, the corporation must initiate the deposit by 8 p.m. Eastern
time the day before the date the deposit is due. If the corporation
uses a third party to make deposits on its behalf, they may have
different cutoff times.
Same-day wire payment option. If the corporation fails to
initiate a deposit transaction on EFTPS by 8 p.m. Eastern time
the day before the date a deposit is due, it can still make the
deposit on time by using the Federal Tax Application (FTA).
Before using the same-day wire payment option, the corporation
will need to make arrangements with its financial institution
ahead of time. Please check with the financial institution
regarding availability, deadlines, and costs. To learn more about
making a same-day wire payment and download the Same-Day
Payment Worksheet, visit www.eftps.gov.
Foreign corporations. If a foreign corporation maintains an
office or place of business in the United States, it must use
electronic funds transfers (as discussed above) to make
installment payments of estimated tax.
If the foreign corporation does not maintain an office or place
of business in the United States, it may pay the estimated tax by
EFTPS if it has a U.S. bank account. The foreign corporation
may also arrange for its financial institution to initiate a same-day
wire payment on its behalf or can arrange for either a qualified
intermediary, tax professional, payroll service, or other trusted
third party to make a deposit on its behalf using a master
account.
In addition, the foreign corporation has the option to pay the
estimated tax due by check or money order, payable to the
“United States Treasury.” To ensure proper crediting, enter the
foreign corporation's EIN, “Form 1120-F (or 1120-FSC, if
applicable) estimated tax payment,” and the tax period to which
the payment applies on the check or money order. The
payments must be sent to the Internal Revenue Service Center,
P.O. Box 40901, Ogden, UT 84409.

Refiguring Estimated Tax

If, after the corporation figures and deposits estimated tax, it
finds that its tax liability for the year will be more or less than

Nov 29, 2012

Cat. No. 52102x

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.

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.

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.

Specific Instructions

Line 15. Alternative Minimum Tax (AMT)

All line references on Form 1120-W are references to
Form 1120, U.S. Corporation Income Tax Return. All
CAUTION
other entities must determine their estimated tax liability
by using the maximum rate that is in effect for their applicable
taxable year.

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. A limited
amount of the foreign tax credit, as refigured for the AMT, is
allowed in computing the TMT. Use the 2012 Form 4626 and the
2012 Instructions for Form 4626 as a guide.

!

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.

Line 17. Tax Credits

For information on tax credits the corporation can take, see the
2012 Instructions for Form 1120, Schedule J, lines 5a through
5e, or the instructions for the applicable lines and schedule of
other income tax returns.

Line 19. Other Taxes

For information on other taxes the corporation may owe, see the
2012 Instructions for Form 1120, Schedule J, line 9, or the
instructions for the applicable line and schedule of other income
tax returns.

Line 21. Credit for Federal Tax Paid on Fuels
and Other Refundable Credits

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

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 other refundable credit, including any credit the
corporation is claiming under section 4682(g)(2) for tax on
ozone-depleting chemicals. For information on other refundable
credits, see the Instructions for Form 1120, Schedule J, line 19,
or the instructions for the applicable line or schedule of other
income tax returns.

Members of a controlled group, complete lines 2, 5, and 8 as
follows:
Enter on line 2 the smaller of the amount on line 1, or the
member's share of the $50,000 amount.
Enter on line 5 the smaller of the amount on line 4, or the
member's share of the $25,000 amount.
Enter on line 8 the smaller of the amount on line 7, or the
member's share of the $9,925,000 amount.

Line 23a. 2012 Tax

Figure the corporation's 2012 tax in the same way that line 22 of
this worksheet was figured, using the taxes and credits from the
2012 income tax return. Large corporations, see the instructions
for line 25 below.

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.

If a return was not filed for the 2012 tax year showing a
liability for at least some amount of tax or the 2012 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.

Line 24. Installment Due Dates

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 4-15-2013, 6-17-2013,
9-16-2013, and 12-16-2013, respectively, in columns (a) through
(d).

Line 12. Additional 5% Tax

Line 25. Required Installments

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.

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

Payments of estimated tax should reflect any 2012 overpayment
that the corporation chose to credit against its 2013 tax. The
overpayment is credited against unpaid required installments in
the order in which the installments are required to be paid.

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Instructions for Form 1120-W (2013)

If the corporation uses the annualized income installment
method and/or the adjusted seasonal installment method, or is a
"large corporation," see the instructions below.

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.
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)(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 less than $1,000,000 (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.
For more information regarding extraordinary items, see
Regulations section 1.6655-2(f)(ii) and the examples in
Regulations section 1.6655-2(f)(vii). Also see Regulations
section 1.6655-3(d)(3).

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.
If Schedule A is used for any payment date, it must be used for
all payment due dates. To get 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)).

Part I. Adjusted Seasonal
Installment Method

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 2013
tax year, or if less, the number of years the corporation has been
in existence. 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.
Large corporations figure the amount to enter on line 25 as
follows. If Schedule A is used, also follow these instructions to
figure the amounts to enter on Schedule A, Part III, line 35.
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).

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.
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 2013, the
amusement park figures its taxable income for each May–
October period in 2010, 2011, and 2012. 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 2010, 74% (.74) for May–October
2011, and 67% (.67) for May–October 2012. Because the
average of 69%, 74%, and 67% is 70%, the base period
percentage for May through October 2013 is 70%. Therefore,
the amusement park qualifies for the adjusted seasonal
installment method.

Schedule A

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 page 1, Part I, line 25, 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 2

If the corporation has certain extraordinary items, special rules
apply. Do not include on line 2 the de minimis extraordinary
items that the corporation chooses to include on line 9b. See
Extraordinary items above.

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

Line 9b

If the corporation has extraordinary items of $1,000,000 or more,
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 above.

CAUTION

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; and
Instructions for Form 1120-W (2013)

Line 10

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

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Line 15. Alternative Minimum Tax

For more information, see section 6655(e)(4)(B) and
Regulations section 1.6655-2(f)(3)(v)(B)(2).

The corporation may owe AMT unless it will be a “small
corporation” exempt from the AMT under section 55(e) for its
2013 tax year. To figure the AMT, use the 2012 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.

Extraordinary items. 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 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.

Line 16. Other Taxes

For the same taxes used to figure page 1, Part I, line 19, figure
the amounts for the months shown in the column headings
above line 1.

Line 18. Credits

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

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.

3

3

6

9

Option 1

. . .

2

4

7

10

Option 2

. . .

3

5

8

11

Standard option

4

4

2

1.33333

Option 1

. . . .

6

3

1.71429

1.2

Option 2

. . . .

4

2.4

1.5

1.09091

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

Line 25. Alternative Minimum Tax

!

Standard option

4th
Installment

Line 24

Use Option 1 or Option 2 only if the corporation elected
to use one of these options by filing Form 8842,
CAUTION
Election To Use Different Annualization Periods for
Corporate 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.
3rd
Installment

3rd
Installment

If the corporation has certain extraordinary items of $1,000,000
or more, 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 20. Annualization Periods

2nd
Installment

2nd
Installment

Line 23b

Part II. Annualized Income Installment
Method

1st
Installment

1st
Installment

The corporation may owe AMT unless it will be a “small
corporation” exempt from the AMT under section 55(e) for its
2013 tax year. To figure the AMT, use the 2012 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.

4th
Installment

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 21. Taxable Income

Line 28. Credits

If a corporation has income includible under section 951(a)
(controlled foreign corporation income), special rules apply.

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.

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).

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).

Safe harbor election. Corporations may be able to make 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 115% (100%
for a noncontrolling shareholder) 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).

Line 35

“Large corporations,” see the instructions for page 1, line 25, for
the amount to enter.

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Instructions for Form 1120-W (2013)

Line 38. Required Installments

For each installment, enter the smaller of line 34 or line 37 on
line 38. Also enter the result on page 1, Part I, line 25.

Form
1120-W
1120-W, Sch. A (Pt.I)
1120-W, Sch. A (Pt.II)
1120-W, Sch. A (Pt.III)

Paperwork Reduction Act Notice. Your use of this form is
optional. It is provided to aid the corporation in determining its
tax liability.

Preparing
the form &
sending
1 hr., 50 min.
1hr., 26 min.
    49 min.
    12 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:M:S, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send the tax form to this office.
Instead, keep the form for your records.

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:

Instructions for Form 1120-W (2013)

Recordkeeping
10 hr., 45 min.
24 hr., 37 min.
12 hr., 26 min.
 6 hr., 13 min.

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

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