Estimated Tax Payments

Generally, the following rules apply to a foreign corporation’s payments of estimated tax.

• The corporation must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more.

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

• If the foreign corporation maintains an office or place of business in the United States, it must use electronic funds transfer to make installment payments of estimated tax.

Instructions for Form 1120-F (2025) 9

• 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, providing it has a U.S. bank account. The foreign corporation may also arrange for its financial institution to submit a same-day payment on its behalf or can arrange for its 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 still has the option to pay the estimated tax due by check or money order.

• Form 720, Quarterly Federal Excise Tax Return;

• Form 941, Employer’s QUARTERLY Federal Tax Return;

• Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees;

be imposed if the corporation can show that the failure to pay on time was due to reasonable cause. See Caution above.

Trust fund recovery penalty. This penalty may apply if certain excise, income, social security, and Medicare taxes that must be collected or withheld are not collected or withheld, or these taxes are not paid. These taxes are generally reported on:

• 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. See Estimated tax penalty below.

• If the corporation overpaid estimated tax, it may be able to get a quick refund by filing Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax. See the instructions for line 5c, later.

See section 6655 and Pub. 542, Corporations, for more information on how to figure estimated taxes.

Estimated tax penalty. A corporation that does not make estimated tax payments when due may be subject to an underpayment penalty for the period of underpayment. Generally, a corporation is subject to the penalty if its tax liability is $500 or more and it did not timely pay at least the smaller of:

• Its tax liability for the current year, or

• Its prior year’s tax. No estimated tax payments are required with respect to a foreign corporation’s liability for the branch profits tax. See Regulations section 1.884-1(a).

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. If Form 2220 is completed, enter the penalty on Form 1120-F, page 1, line 6. See the instructions for line 6, estimated tax penalty, later. Also, see Extension of relief from additions to tax for underpayments applicable to the corporate alternative minimum tax (CAMT), earlier.