220: PTE Underpayment of Estimated Tax by Corporations & Pass-Through Entities (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 220/PTE calculates underpayments of estimated tax and any resulting penalty for corporations and pass-through entities for 2024. It includes calculations for required installments, payments or credits, and annualized income or adjusted seasonal installments.
Who files this form
Most taxpayers do not have to file Form 220/PTE. The department will calculate any penalty due and bill the taxpayer.
You must file Form 220/PTE with your tax return if any box in Part A applies, even if no penalty is due:
- You use the annualized income installment method.
- You use the adjusted seasonal installment method.
- You file Form 120 or 120A and are a “large corporation” calculating your first required installment using the prior taxable year’s tax liability.
- You file Form 120S as an S corporation subject to federal-level tax and calculate your required annual payment using the sum of 90% of the current year’s liability attributable to built-in gains or certain capital gains income, plus 100% of the prior year’s liability attributable to excess net passive income.
When it's due
For tax year 2024, Part B, line 7 lists estimated-tax installment due dates as the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year.
The form directs PTEs to see the instructions for their installment due dates. Those instructions were not provided.
If filing is required, submit Form 220/PTE with your tax return. The form does not print a separate filing deadline for Form 220/PTE.
What you'll need
Have these returns and records available for the entries that apply to you:
- Your 2024 Arizona return: Form 99T, 120, 120A, 120S, or 165 for a partnership making the PTE election. Use the same taxpayer name and EIN.
- Your 2023 return if you file Form 99T, 120, or 120A and need the prior-year tax amount for line 6b.
- Records of estimated tax paid or credited for each installment period, including payment dates.
- If using Schedule A, taxable income for the required periods, tax-credit amounts, credit recapture, and any claim of right adjustment.
- If using the adjusted seasonal installment method, taxable-income records for the periods listed for taxable years beginning in 2021, 2022, 2023, and 2024.
How to file
If any Part A box applies, check the applicable boxes and include Form 220/PTE with your tax return, even if no penalty is due. Partnerships and S corporations that made the PTE election must also check the PTE-election box on the form.
If you are not required to file Form 220/PTE, you may still use it to calculate the penalty. Enter the penalty on your return’s estimated-tax underpayment penalty line, but do not check the box on that return line or include Form 220/PTE with the return.
The supplied form does not give a mailing address or e-filing directions.
Common mistakes
- Leaving out a required form because no penalty is due. If any Part A box is checked, you must include Form 220/PTE with your return.
- Attaching the form when you only used it for an optional calculation. If filing is not required, report the penalty without attaching Form 220/PTE or checking the box on the return’s penalty line.
- Using the adjusted seasonal method when it is not allowed. It is not available to partnerships or S corporations that made the PTE election. The form also cautions that this method may be used only if the base period percentage for any six consecutive months is at least 70%.
- Completing the installment columns in the wrong order. Complete lines 10 through 16 of each column before moving to the next column. For column (a), skip lines 10 through 12 and carry line 9 to line 13.
Questions people ask
Can I use Form 220/PTE even if I do not have to file it?
Yes. You may use it to calculate the penalty and enter that amount on your return. Do not attach the form or check the box on the return’s penalty line if filing Form 220/PTE is not required.
Can a partnership or S corporation that made the PTE election use the annualized income method?
Yes. The form makes that method available to those entities. It does not allow them to use the adjusted seasonal installment method.
Is there a limit on the calculated penalty?
Yes. For each installment column, Part C, line 36 uses the smaller of 10% of the underpayment on Part B, line 15, or the penalty calculated on Part C, line 35. Line 37 adds those limited amounts.
Does the form provide every percentage rate needed for the penalty calculation?
No. The form prints an 8% rate for the listed 2024 calculation periods. Later calculation lines use an asterisk, with the note “Percentage rate to be announced.”