2220AL: Estimated Tax Penalties for Corporations (2024)
Alabama · Alabama DOR · Used for tax years 2024
Alabama Form 2220AL calculates underpayments of estimated tax and related penalties and interest for corporations and electing pass-through entities. It reports required installments, estimated tax paid or credited, and quarterly underpayments or overpayments.
Who files this form
For tax year 2024, Form 2220AL is generally not required unless you choose an alternative method provided on the form to calculate interest and penalties for underpaid estimated tax.
The form says you must file it if you check any applicable filing-reason box, including:
- Large Corporation 1st quarter exception.
- K-1 Exception.
- Annualized income installment method.
- Adjusted seasonal installment method.
Electing Pass-Through Entities also use this form. If your entity has elected that status, read references to “Corporation” as “Electing Pass-Through Entity.”
When it's due
For tax year 2024, line 7 lists estimated tax installment due dates as the 15th day of the 4th, 6th, 9th, and 12th months of the corporation’s tax year.
For the interest calculation, the 2024 form uses the payment date or the 15th day of the 4th month after the tax year closes, whichever is earlier. S corporations and Electing Pass-Through Entities use the 3rd month instead of the 4th month.
The supplied form does not print a separate filing deadline for Form 2220AL.
What you'll need
Have these forms and figures available:
- Your entity’s name and federal employer identification number.
- Current tax-period liability and the 2023 corporation tax return, if line 2 applies.
- Estimated tax payments or credits for each period, along with payment dates.
- A copy of federal Form 2220, which must accompany Form 2220AL when it is used.
- The applicable Alabama return: Form 20C, 20C-C, 20S, or EPT.
If you use Schedule A, you will need annualized taxable income from federal Form 2220, plus the Alabama adjustments, apportionment factor, deductions, and credits requested by the schedule.
If you use Schedule B, you will need taxable income for the specified periods in tax years beginning in 2021, 2022, 2023, and 2024, plus the requested apportionment factor, deductions, and credits.
How to file
If you use Form 2220AL, include it and a copy of federal Form 2220 with your applicable Alabama return: Form 20C, 20C-C, 20S, or EPT.
Enter the total penalty from Part IV, line 23, on Part II, line 4a. Enter the total interest from Part V, line 42, on Part II, line 4b. Also report these amounts on Form 20C, lines 21c and 21d, or the appropriate lines of the other applicable return.
The supplied text does not provide a mailing address or e-filing directions.
Common mistakes
- Using the prior-year tax when line 2 must be skipped. The form cautions you to skip line 2 if the prior-year tax liability is zero, the taxpayer is a large corporation, or the prior tax period was less than 12 months. Enter line 1 on line 3 instead.
- Overlooking the large-corporation payment rule. The form notes that large corporations must pay 100% of the current-year tax.
- Calculating a penalty or interest without an underpayment. Do not complete Part IV or V if there is no underpayment on line 15. The form says no penalty or interest is owed in that case.
- Moving between columns too soon. Complete lines 10 through 16 in one column before moving to the next. Similar reminders apply to lines 19 through 22 and lines 44 through 49.
- Dividing by the wrong amount on Schedule B. Lines 8 and 20 say to divide by 3, not by line 3.
Questions people ask
Can an Electing Pass-Through Entity use Form 2220AL?
Yes. The form directs an entity that has elected this status to substitute “Electing Pass-Through Entity” wherever the form refers to “Corporation.”
Which schedule do I use for an alternative installment method?
Use Schedule A for the annualized income installment method or Schedule B for the adjusted seasonal installment method. These schedules feed into Part VI to determine required installments.
How does the form calculate the late-payment penalty?
Part IV, line 22, multiplies the underpayment on line 21 by 10%. If line 21 shows an overpayment, leave line 22 blank. Line 23 totals the penalties across the four columns.
Where can I find the interest rates needed for the form?
The form says Alabama interest rates are tied to IRS rates and directs you to use the penalty interest rate for each calendar quarter. It lists quarterly IRS news releases and revenue rulings as sources, along with www.irs.gov and 1-800-829-4933.