2220-K: Underpayment of Estimated Tax Penalty (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Kentucky Form 2220-K calculates the penalty for underpayment of estimated income tax and LLET for 2024. It records required installments, payments or credits, underpayments, and the resulting penalty, and is attached to Form 720, 720U, PTE, or 725.
Who files this form
Form 2220-K is for corporations and pass-through entities required to file a declaration of estimated tax. Use it to determine whether an underpayment penalty applies and to calculate the penalty.
Only corporations filing Form 720 or 720U complete Part I. The form says to file Form 2220-K even if no penalty is owed when a Part I, line 2 box is checked for:
- Using the adjusted seasonal installment method.
- Using the annualized income installment method.
- Being a large corporation required to figure its first installment using the prior year's tax.
Parts II, III, and IV apply to all entities. Attach Form 2220-K to the applicable Kentucky return.
When it's due
For tax year 2024, the form lists estimated tax installment due dates as:
- First installment: 15th day of the 4th month of the tax year.
- Second installment: 15th day of the 6th month.
- Third installment: 15th day of the 9th month.
- Fourth installment: 15th day of the 12th month.
For the 2024 tax year, an election on Federal Form 8842 to use different annualization periods must be made on or before the first required installment payment's due date.
The text does not state a separate filing deadline for Form 2220-K. It must be attached to the applicable return.
What you'll need
Have these returns and details available:
- Your 2024 Kentucky return and, when eligible to use prior-year tax, your 2023 return.
- Schedule TCS tax credit amounts and the nonrefundable LLET credit used to determine tax after credits.
- Estimated tax payments and credits for each installment period, including prior-year credits, and the dates installments were paid in full.
- Your entity's name, Federal Identification Number, and Kentucky Corporation/LLET Account Number.
If using the adjusted seasonal or annualized income installment method, use the Kentucky-converted Federal Form 2220, Schedule A, and the worksheet on page 6. The converted Schedule A must be attached to Form 720 or 720U.
If you elected different annualization periods on Federal Form 8842, attach a copy of that election to Form 720 or 720U.
How to file
Attach Form 2220-K to Form 720, 720U, PTE, or 725, as applicable.
Transfer the total penalty from Part IV, column (d), line 27 to the applicable return:
- If tax is due, add it to the "Estimated Tax Penalty" line.
- If tax is overpaid, add it to the "Credited to 2024 late file/pay penalty" line.
Include the Kentucky-converted Schedule A and a copy of the Form 8842 election when applicable. The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Using prior-year tax when it is not allowed. Skip Part II, line 4 if prior-year LLET equals the $175 minimum and prior-year income tax equals $0, or if the prior-year tax period was less than 12 months. Use current-year tax instead.
- Working across columns too soon. Complete Part III, lines 11 through 17 in one column before moving to the next. The page 6 worksheet also requires completing lines 3 through 7 in preceding columns before entering line 2 in later columns.
- Including the nonrefundable LLET credit on worksheet line 8. The instructions specifically say not to include it there.
- Leaving out required attachments. Attach Form 2220-K to the return. When applicable, also attach the Kentucky-converted Schedule A and the Form 8842 election copy.
Questions people ask
When is no underpayment penalty due?
No penalty is due if the 2024 tax amount on Part II, column C, line 3, or the total of page 6 worksheet line 12 when applicable, is less than $5,000. No penalty is due if the tax period is less than 4 months.
Can I owe a penalty even if my return shows a refund?
Yes. The penalty is figured separately for each installment due date. Paying enough later to make up an earlier underpayment does not necessarily eliminate the penalty, even if the return shows a refund.
Can seasonal or uneven income affect my installments?
Yes. A corporation whose income varied during the year may be able to lower or eliminate one or more required installments by using the adjusted seasonal installment method or the annualized income installment method.
Can a large corporation use prior-year tax for every installment?
No. A large corporation can base only its first required installment on the prior year's tax.