2220-K: Underpayment of Estimated Tax Penalty (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
Kentucky Form 2220-K calculates the penalty for underpayment of estimated income tax and limited liability entity tax (LLET). It reports 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 under KRS 141.044. Use it to determine whether an underpayment penalty applies and to calculate the amount. Attach it to the applicable Kentucky return.
Only corporations filing Form 720 or 720U complete Part I. The form says to file even if no penalty is owed when a Part I, line 2 box is checked for:
- The adjusted seasonal installment method.
- The annualized income installment method.
- A “large corporation” under IRC § 6655 that must figure its first required installment using the prior year's tax.
Parts II, III, and IV apply to all entities.
When it's due
For tax year 2025, Part III lists these estimated-tax installment due dates:
- First installment: 15th day of the 4th month of the tax year.
- Second installment: 15th day of the 6th month of the tax year.
- Third installment: 15th day of the 9th month of the tax year.
- Fourth installment: 15th day of the 12th month of the tax year.
For a 2025 election to use a different annualization period on Federal Form 8842, make the election on or before the first required installment payment's due date.
What you'll need
Have these returns and details available:
- Your 2025 Kentucky return and Schedule TCS tax-credit amounts.
- Your 2024 Kentucky return and tax-credit amounts, if eligible to use the prior year's tax.
- Estimated-tax payments and credits for each installment period, including prior-year credits, and the dates installments were paid in full.
- The entity's name, federal identification number, and Kentucky Corporation/LLET account number.
If using the adjusted seasonal or annualized income installment method, complete the Kentucky-converted Federal Form 2220, Schedule A, and the worksheet on page 6. Attach the converted Schedule A to Form 720 or 720U.
If you elected a different annualization period on Federal Form 8842, also attach a copy of that election to Form 720 or 720U.
How to file
Attach Form 2220-K to your applicable Kentucky Form 720, 720U, PTE, or 725.
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 2025 late file/pay penalty” line.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Using an incomplete account number. The Kentucky Corporation/LLET account number must have 9 digits. Add leading zeros if it has 6 digits.
- Using prior-year tax when it is not allowed. Skip Part II, line 4 if prior-year LLET is $175 and prior-year income tax is $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 for one column before moving to the next. On the page 6 worksheet, complete lines 3 through 7 in preceding columns before calculating line 2 in the next column.
- Including the wrong credit on the worksheet. Do not include the nonrefundable LLET credit on page 6, line 8.
- Leaving out required attachments. The text warns that the Kentucky-converted Schedule A and, when applicable, the Form 8842 election copy must be attached to Form 720 or 720U to avoid underpayment interest and penalties.
Questions people ask
When is no underpayment penalty due?
No penalty is due if the 2025 amount on Part II, column C, line 3, or the applicable total of page 6, line 12, 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 calculated separately for each installment due date. Paying enough later to make up an earlier underpayment does not necessarily remove the penalty, even if your return shows a refund.
Can seasonal or uneven income affect the calculation?
Yes. A corporation with income that varied during the year may be able to reduce or eliminate one or more required installments by using the adjusted seasonal or 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.