2220AL: Estimated Tax Penalties for Corporations (2025)
Alabama · Alabama DOR · Used for tax years 2025
Alabama Form 2220AL calculates estimated tax underpayments, penalties, and interest for corporations and electing pass-through entities. It reports required installments, estimated tax payments or credits, and quarterly underpayments or overpayments, with provisions for annualize
Who files this form
Form 2220AL is for corporations and Electing Pass-Through Entities calculating interest and penalties for underpaid estimated tax.
The form says it is not required unless the taxpayer chooses an alternative calculation method provided on Form 2220AL. It also says the corporation must file if any applicable reason-for-filing box is checked. These include:
- The annualized income installment method.
- The adjusted seasonal installment method.
- The large corporation first-quarter exception.
- The K-1 exception.
For an Electing Pass-Through Entity, references to a corporation apply to that entity.
When it's due
For tax year 2025, 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, use 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 text does not state a separate filing deadline for Form 2220AL.
What you'll need
Have these forms and details available:
- The entity’s name and federal employer identification number.
- Current tax period liability and, if line 2 applies, the tax shown on the corporation’s 2024 return.
- Estimated tax amounts paid or credited for each period, plus payment dates for the interest calculation.
- A copy of federal Form 2220, which should accompany Form 2220AL and the applicable Alabama return.
- The applicable Alabama return: Form 20C, 20C-C, 20S, or EPT.
If using Schedule A, you will need annualized taxable income from federal Form 2220, line 23c, and the Alabama adjustments, apportionment factor, deductions, and credits requested on the schedule.
If using Schedule B, you will need taxable income for the specified periods in tax years beginning in 2022, 2023, 2024, and 2025, along with the other tax figures requested on that schedule.
How to file
If you use Form 2220AL, include it and a copy of federal Form 2220 with the applicable Alabama return: Form 20C, 20C-C, 20S, or EPT.
Report the total penalty from Part IV, line 23, on Form 2220AL, line 4a, and Form 20C, line 21c, or the comparable line on another income tax return. Report total interest from Part V, line 42, on Form 2220AL, line 4b, and Form 20C, line 21d, or the comparable line on another income tax return.
The supplied text does not give a mailing address or electronic filing instructions.
Common mistakes
- Using prior-year tax when line 2 must be skipped. The line 2 caution says to skip it 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 reminder. Large corporations are required to pay 100% of current-year tax.
- Moving between columns too soon. Complete lines 10 through 16 in one column before moving to the next. The form gives similar reminders for lines 19 through 22 and lines 44 through 49.
- Calculating a penalty or interest without an underpayment. Do not complete Part IV or Part V if line 15 shows no underpayment. The form says no penalty or interest is owed in that case.
- 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 this form?
Yes. The form says to substitute “Electing Pass-Through Entity” wherever it refers to a corporation if the entity has made that election.
Which schedule applies to my installment method?
Use Schedule A for the annualized income installment method and Schedule B for the adjusted seasonal installment method. Compute the required installments before calculating interest and penalties.
What if I complete both Schedule A and Schedule B?
On line 43, enter the smaller amount in each column from Schedule A, line 19, or Schedule B, line 23, and check the box on line 43.
How is the late payment penalty calculated?
Part IV, line 22, multiplies the underpayment on line 21 by 10%. If line 21 shows an overpayment, leave line 22 blank. Add the four columns on line 22 to get the total penalty on line 23.
Where can I find the interest rates marked with an asterisk?
The form says Alabama interest rates are tied to IRS rates. Use the penalty interest rate for each calendar quarter. The form directs taxpayers to www.irs.gov or 1-800-829-4933 for this information.