Instructions for Form 2220 - Underpayment of Estimated Tax by Corporations - DRAFT

Sep 19, 2026

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Early release draft instructions for IRS Form 2220, Underpayment of Estimated Tax by Corporations, explaining how corporations determine whether they are liable for underpayment penalties and how to calculate the applicable penalty amount. The draft outlines purpose, who must file, and who must pay, including criteria for attachment even when no penalty is owed. It also summarizes key updates for tax years beginning in 2025, including relief provisions tied to CAMT and related filing and reporting requirements.

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CategoryForms

FormatPDF

Pages6

Reading Time2 min

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Underpayment of Estimated Tax by Corporations - Draft Instructions for Form 2220

Purpose of Form

Who Must File

Who Must Pay the Underpayment Penalty

What’s New

Note: The draft you are looking for begins on the next page. Caution: DRAFT—NOT FOR FILING This is an early release draft of an IRS tax form, instructions, or publication, which the IRS is providing for your information. Do not file draft forms. We incorporate all significant changes to forms posted with this coversheet. However, unexpected issues occasionally arise, or legislation is passed—in this case, we will post a new draft of the form to alert users that changes were made to the previously posted draft. Thus, there are never any changes to the last posted draft of a form and the final revision of the form. Forms and instructions are subject to OMB approval before they can be officially released, so we post drafts of them until they are approved. Drafts of instructions and pubs usually have some additional changes before their final release. Early release drafts are at [IRS.gov/DraftForms](IRS.gov/DraftForms and)[ and](IRS.gov/DraftForms and) remain there after the final release is posted at [IRS.gov/LatestForms](IRS.gov/LatestForms. Also see)[. Also see](IRS.gov/LatestForms. Also see) [IRS.gov/Forms](IRS.gov/Forms). Most forms and publications have a page on [IRS.gov:](IRS.gov:) [IRS.gov/Form1040](IRS.gov/Form1040 for)[ for](IRS.gov/Form1040 for)[ ](IRS.gov/Form1040 for)Form 1040; [IRS.gov/Pub501](IRS.gov/Pub501) for Pub. 501; [IRS.gov/W4](IRS.gov/W4 for Form W-4)[ for Form W-4](IRS.gov/W4 for Form W-4); and [IRS.gov/ScheduleA](IRS.gov/ScheduleA for Schedule A)[ for Schedule A](IRS.gov/ScheduleA for Schedule A) (Form 1040), for example, and similarly for other forms, pubs, and schedules for Form 1040. When typing in a link, type it into the address bar of your browser, not a Search box on [IRS.gov](IRS.gov). If you wish, you can submit comments to the IRS about draft or final forms, instructions, or pubs at [IRS.gov/FormsComments](IRS.gov/FormsComments. Include)[. Include](IRS.gov/FormsComments. Include) “NTF” followed by the form or pub number (for example, “NTF1040”,“NTFW4”, “NTF501”, etc. ) in the body of the message to route your message properly. We cannot respond to all comments due to the high volume we receive and may not be able to consider many suggestions until the subsequent revision of the product, but we will review each “NTF”message. If you have comments on reducing paperwork and respondent (filer) burden, with respect to draft or final forms, please respond to the relevant information collection through the Federal Register process; for more info, click here. DRAFT 2025TREASURY/IRS AND OMB USE ONLY DRAFT Instructions for Form 2220 Underpayment of Estimated Tax by Corporations Section references are to the Internal Revenue Code unless otherwise noted. Future For the latest information about developments affecting Form 2220 and its instructions, such as legislation enacted after they were published, [go to](go to IRS.gov/Form2220)[ ](go to IRS.gov/Form2220)[IRS.gov/Form2220](go to IRS.gov/Form2220) . What’s New Extension of relief from additions to tax underpayments applicable to the corporate alternative minimum tax (CAMT). For tax years beginning in 2025, the IRS will continue to waive the penalty imposed under section 6655 for failure to make estimated tax payments attributable to a CAMT liability. Affected corporations must still file the 2025 Form 2220, even if they owe no estimated tax penalty. However, affected corporations may exclude the CAMT tax liability when calculating the required annual payment on Form 2220. Affected corporations must also include an amount of estimated tax penalty on Line 34 of Form 1120, U.S. Corporation Income Tax Return (or other appropriate line of the corporation's income tax return), even if that amount is zero. Failure to follow these instructions could result in affected corporations receiving a penalty notice that will require an abatement request to apply the relief. See Notice 2025-27, 2025-26 I. R. B. 1611. Also, see the instructions for

FAQs

What is Form 2220 used for, according to the draft instructions?

Corporations use Form 2220 to determine whether they are subject to the underpayment penalty for estimated tax and, if so, the amount of the underpayment penalty for the applicable period.

When does a corporation generally need to file and attach Form 2220?

The draft states a corporation usually does not file it with its income tax return because the IRS figures the penalty and notifies the corporation. However, it must attach the form if Part I, line 3 is $500 or more and certain conditions apply, such as using specific installment methods.

How does the draft describe when a corporation is subject to the underpayment penalty?

A corporation is subject to the penalty if it did not timely pay at least the smaller of the tax shown on its 2025 return or the tax shown on its 2024 return (when applicable). The draft also notes that a large corporation can base only its first required installment on the prior year’s tax.

Sep 19, 2026

Upload by Violet