Because of a change in law from 2012 that was designed to meet certain congressional budgetary scoring goals, corporations with assets of $1 billion or more must increase the required installment of estimated tax due in July, August or September of 2017 by 0.25% of the amount that otherwise would have been due for that installment. The amount of the next required installment would be decreased by an equal amount to reflect the increase in the previous installment.
For example, an applicable calendar-year corporation with an installment of estimated tax due in September that was otherwise $1 million, would make a timely payment of $1,002,500. If the corporation had the same amount of estimated tax otherwise due in December, the corporation would make a timely payment of $997,500. Required installments are generally due by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year. If a due date falls on a Saturday, Sunday or legal holiday, the installment is due on the next regular business day.
The law is unclear as to how a corporation calculates its assets in order to determine whether it meets the $1 billion size threshold. To avoid potential penalties, taxpayers should consider taking a conservative approach in determining whether they meet these requirements, which are described in the instructions of Form 1120-W, Estimated Tax for Corporations.
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