Worksheet for Form 2210, Part IV, Section B—Figuring Your Penalty

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Worksheet for Form 2210, Part IV, Section B—Figuring Your Penalty

Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. The penalty is imposed on each underpayment shown in Section A, line 25, for the number of days that it remained unpaid.

For 2011, there are four rate periods—a 4% rate is in effect from April 16, 2011 through June 30, 2011 and from July 1, 2011 through September 30, 2011, and a 3% rate is in effect from October 1, 2011 through December 31, 2011 and from January 1, 2012 through April 15, 2012. Use the Penalty Worksheet to figure the penalty and enter the result in Section B, line 27 of Form 2210.

Payments. Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. For example, if you had an underpayment for the first payment period, list your payments after April 15, 2011. You can use the table in the Form 2210 instructions to make your list. Follow those instructions for listing income tax withheld and payments made with your return. Use the list to determine when each underpayment was paid.

If you mail your estimated tax payments, use the date of the U.S. postmark as the date of payment.

Line 1b. Apply the payments listed to underpayment balance in the first column until it is fully paid. Apply payments in the order made.

Example 1. In the previous example for Ben and Sally Brown (see Example—regular method under Figuring Your Underpayment (Part IV, Section A)), they determined that they had an underpayment for all four payment periods. See their completed Section A in Figure 4-B (Continued) , later.

Their $1,584 withholding (WH) is considered paid in four equal installments of $396, one on each payment due date. Therefore, they must make estimated tax payments (EST) of $1,468 ($1,864 required installment - $396 WH) each period. However, they made only two estimated tax payments—$950 on September 15, 2011, and $950 on January 15, 2012. They plan to file their return and pay their balance due on April 17, 2012. Ben and Sally are considered to have made the following payments for tax year 2011.

Payment Amount Payment Date
$396 WH 4/15/11
$396 WH 6/15/11
$396 WH 9/15/11
$950 EST 9/15/11
$396 WH 1/15/12
$950 EST 1/15/12

When completing line 1b of the worksheet combine all payments made on the same date to reduce your computations.

Ben entered the underpayment amount from line 25 of Form 2210 on line 1a of their Penalty Worksheet for each column. On line 1b, column (a) he entered “6/15/11 – 396” and “9/15 – 1,072.” Their combined payment for 9/15/11 was $1,346 ($396 WH + $950 EST). They used $1,072 of the 9/15 payment to fully pay the underpayment on line 1a, column (a). He entered “9/15/11 – 274” (the remainder of their September payment) and “1/15/12 – 1,346” from January to fully pay the underpayment in column (b).

Figuring the penalty. If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. If no payments are applied, figure the penalty on the amount on line 1a.

Aid for counting days. Table 4-1 provides a simple method for counting the number of days between a due date and a payment date.
  1. Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date.

  2. In the same manner, find the number for the date the payment was made.

  3. Subtract the due date “number” from the payment date “number.

For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late.

Table 4-1.Calendar To Determine the Number of Days a Payment Is Late

Instructions.Use this table with Form 2210 if you are completing Part IV, Section B. First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Then, in the same manner, find the number for the date the payment was made. Finally, subtract the due date number from the payment date number. The result is the number of days the payment is late.

Example.The payment due date is June 15 (61). The payment was made on November 4 (203). The payment is 142 days late (203 – 61).

Tax Year 2011
Day of 2011 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012
Month April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.
1 16 47 77 108 139 169 200 230 261 292 321 352
2 17 48 78 109 140 170 201 231 262 293 322 353
3 18 49 79 110 141 171 202 232 263 294 323 354
4 19 50 80 111 142 172 203 233 264 295 324 355
5 20 51 81 112 143 173 204 234 265 296 325 356
6 21 52 82 113 144 174 205 235 266 297 326 357
7 22 53 83 114 145 175 206 236 267 298 327 358
8 23 54 84 115 146 176 207 237 268 299 328 359
9 24 55 85 116 147 177 208 238 269 300 329 360
10 25 56 86 117 148 178 209 239 270 301 330 361
11 26 57 87 118 149 179 210 240 271 302 331 362
12 27 58 88 119 150 180 211 241 272 303 332 363
13 28 59 89 120 151 181 212 242 273 304 333 364
14 29 60 90 121 152 182 213 243 274 305 334 365
15 0 30 61 91 122 153 183 214 244 275 306 335 366
16 1 31 62 92 123 154 184 215 245 276 307 336
17 2 32 63 93 124 155 185 216 246 277 308 337
18 3 33 64 94 125 156 186 217 247 278 309 338
19 4 34 65 95 126 157 187 218 248 279 310 339
20 5 35 66 96 127 158 188 219 249 280 311 340
21 6 36 67 97 128 159 189 220 250 281 312 341
22 7 37 68 98 129 160 190 221 251 282 313 342
23 8 38 69 99 130 161 191 222 252 283 314 343
24 9 39 70 100 131 162 192 223 253 284 315 344
25 10 40 71 101 132 163 193 224 254 285 316 345
26 11 41 72 102 133 164 194 225 255 286 317 346
27 12 42 73 103 134 165 195 226 256 287 318 347
28 13 43 74 104 135 166 196 227 257 288 319 348
29 14 44 75 105 136 167 197 228 258 289 320 349
30 15 45 76 106 137 168 198 229 259 290 350
31 46 107 138 199 260 291 351
Example 2. Continuing from the previous example for Ben and Sally Brown (see Example 1 under Line 1b), they figure their penalty. First, they complete lines 3 and 4 for Rate Period 1, which runs from April 16, 2011, to June 30, 2011.

Penalty for first payment period (April 15, 2011)—column (a). Line 1b of their Penalty Worksheet shows “6/15/2011 – 396” and
9/15/11 – 1,072.” $396 remained unpaid 61 days (April 16 through June 15, 2011) and $1,072 remained unpaid 76 days (April 16 through June 30, 2011). On line 3, column (a), they enter “61” and “76,” along with the date of each payment.

Next, on line 4, they figure the penalty separately for each underpayment amount, $2.65 ($396 × (61 ÷ 365) × .04) and $8.93 ($1,072 × (76 ÷ 365) × .04). See their completed Penalty Worksheet, later.

For Rate Period 2 , $1,072 of the underpayment remained unpaid for 77 days (June 30, 2011 to September 15, 2011). Ben and Sally enter “77” on line 6.

Penalty for second payment period (June 15, 2011)—column (b). Line 1b for column (b) shows “9/15/11 – 274” and “1/15/12 – 1,346.” $274 remained unpaid until June 30 (15 days). $1,346 remained unpaid until June 30. The number of days from June 15 until the end of Rate Period 1 (June 30) is 15. They enter “15” and “15” on line 3, column (b), and figure the penalty separately for each underpayment amount.

For Rate Period 2 , $274 of the underpayment remained unpaid for 77 days (June 30, 2011 to September 15, 2011), and the remaining $1,346 remained unpaid for 92 days (June 30, 2011 to September 30, 2011).

For Rate Period 3 , $1,346 of the underpayment remained unpaid for 92 days (September 30, 2011 to December 31, 2011).

For Rate Period 4 , $1,346 of the underpayment remained unpaid for 15 days (December 31, 2011 to January 15, 2012).

Penalty for third payment period (September 15, 2011)—column (c). The $1,864 underpayment on line 1a, column (c), remained fully underpaid for 15 days during the second rate period.

For Rate Period 3 , the entire balance remained unpaid for 92 days (September 30, 2011 to December 31, 2011).

For Rate Period 4 , the entire balance remained unpaid for 106 days (December 31, 2011 to April 15, 2012).

Penalty for fourth payment period (January 15, 2012)—column (d). Since all payments have been applied, the entire amount remained unpaid 91 days (January 16 through April 15, 2012). They enter that number on line 12, column (d), and figure the penalty for the $1,864 underpayment, entering it on line 13, column (d).

Total penalty. Ben and Sally's total penalty for 2011 on line 14 is $98.23, the total of all amounts on lines 4, 7, 10, and 13 in all columns. See their completed Penalty Worksheet.

Ben and Sally enter that amount on Form 2210, line 27, and on line 77 of their Form 1040. They also add $98.23 to their $4,000 tax balance and enter the $4,098.23 total on line 76. They file their return on April 17 and include a check for $4,098.23. They keep their completed Form 2210 for their records.