221-SBI: Underpayment of Estimated Tax for Small Business Income (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 221-SBI calculates underpayments of estimated tax for 2024 small business income and any resulting penalty. It is used with Forms 140-SBI, 140NR-SBI and 140PY-SBI and includes an annualized income installment worksheet.
Who files this form
Form 221-SBI calculates underpayments of estimated tax and the related penalty for Arizona small business income. It is for use with Forms 140-SBI, 140NR-SBI, and 140PY-SBI, and says to include it with your return.
If your 2024 tax minus the tax credits claimed on your Arizona Small Business Income tax return is less than $1,000, stop at line 4. You do not owe the penalty and should not file Form 221-SBI.
When it's due
For tax year 2024, line 8 lists these estimated tax payment due dates:
- April 15, 2024
- June 17, 2024
- September 16, 2024
- January 15, 2025
The form does not state a separate filing deadline for Form 221-SBI.
What you'll need
Have these records and details available to complete the form:
- Your 2024 Form 140-SBI, 140NR-SBI, or 140PY-SBI, including the tax amount and tax credits claimed.
- Your immediately preceding year's tax liability after tax credits.
- Records of small business income estimated tax payments, including amounts and payment dates.
- Your name and Social Security number. For a joint return, also provide your spouse's name and middle initial.
If you use the annualized income method, you will also need Arizona small business taxable income and allowed tax credits for the periods ending March 31, May 31, August 31, and December 31, 2024, each beginning January 1, 2024.
How to file
Include Form 221-SBI with your Form 140-SBI, 140NR-SBI, or 140PY-SBI, unless the line 4 rule tells you not to file it.
The supplied form does not provide a mailing address or instructions for filing by mail or electronically.
Common mistakes
- Filing when line 4 is less than $1,000. The form says to stop, because no penalty is owed, and not to file Form 221-SBI.
- Working across columns too soon. Complete lines 11 through 13 of one column before starting line 11 of the next column.
- Skipping the alternate installment method checkbox. Line 9 says to check the box if you use any other installment method.
- Skipping the annualization worksheet. If you annualize, complete page 2 and transfer each column's line 15 amount to page 1, line 9. Complete worksheet lines 1 through 15 for one column before moving to the next.
Questions people ask
How is the required annual payment calculated?
Line 7 uses the smaller of 90% of your 2024 tax after credits or your immediately preceding year's tax liability after credits.
How many estimated payments does the form use?
Line 9 says to divide the required annual payment by the number of payments required for the year, usually four.
Can I use annualized income to calculate installments?
Yes. The form provides an Annualized Income Installment Worksheet on page 2. Enter its line 15 amounts in the corresponding columns of page 1, line 9.
Does the form provide a way to claim a federal-relief exception?
Yes. Line 1 has a checkbox for claiming an exception from the estimated payment penalty because you qualified for federal relief under IRC § 6654. It directs you to the instructions, which were not supplied here.