2220ME: Underpayment of Estimated Tax by Corporations or Financial Institutions (2024)
Maine · Maine Revenue Services · Used for tax years 2024
Maine Form 2220ME helps corporations and financial institutions determine whether they paid enough estimated tax on time for 2024. It calculates installment underpayments and any resulting penalty and is enclosed with Form 1120ME or Form 1120B-ME.
Who files this form
Form 2220ME helps corporations and financial institutions determine whether they paid enough estimated tax on time and whether they owe an underpayment penalty for 2024.
In general, a penalty may apply if you did not pay the lesser of:
- 90% of your 2024 tax liability, or
- 100% of your 2023 tax liability, if the 2023 return covered 12 months.
Large corporations, as defined by IRC § 6655(g)(2)(A), must also meet the test in 36 M.R.S. § 5228(5)(C).
You do not have to pay the penalty or file this form if either your 2024 tax liability after allowable credits is less than $1,000 or your 2023 tax liability was less than $1,000. Paying at least 90% of the 2024 tax when due may avoid the penalty, even if you are required to file this form.
When it's due
For the 2024 taxable year, estimated tax installments are due on the 15th day of the 4th, 6th, 9th and 12th months of the taxable year. Enter those payment due dates in columns A through D.
What you'll need
Have the following information available to complete the form:
- Your 2024 Form 1120ME or Form 1120B-ME, including the name shown on the return and your FEIN.
- Your 2023 tax liability and whether that return covered a short tax year.
- Estimated tax payment amounts and dates, plus any carryover of a 2023 overpayment.
- The return due date and, if earlier, the date an underpayment was paid to Maine Revenue Services.
If you use actual liability instead of four equal installments, use the Annualized Income Installment Worksheet for Underpayment of Estimated Tax and adequate records establishing liability for each required installment.
How to file
Enclose Form 2220ME with your Form 1120ME or Form 1120B-ME.
Use Part I to calculate installment underpayments. If no exception applies for an installment date, complete Part II to calculate the penalty.
Enter the total penalty from line 13 on Form 1120ME, line 9, or Form 1120B-ME, line 5b.
Common mistakes
- Using the penalty rate table as a fiscal-year filer. The form specifically says fiscal-year filers may not use that table.
- Including slashes or hyphens in your FEIN. The form says not to enter
/or-. - Continuing when an exception applies. If line 1 or line 3 is less than $1,000, do not complete the rest of the form.
- Overlooking a short 2023 tax year. If 2023 was a short year, enter the amount from line 2 on line 3.
- Missing the actual-liability checkboxes. If using actual liability on line 5(a), check that box and the box on Form 1120ME, line 9.
Questions people ask
Must the four estimated tax installments be equal?
Generally, yes. Each installment is 25% of line 4 unless the actual-liability or large-corporation rule applies. Actual liability must be established with adequate records using the annualized income installment worksheet.
Where do I enter a carryover of my 2023 overpayment?
Enter it on line 6a in the column corresponding to the later of the 2023 return due date, without regard to extensions, or the date of the payment that created the overpayment.
How long does the underpayment penalty run?
The form counts months or fractions of a month from the installment payment due date through the return due date, or through the date the underpayment was paid to Maine Revenue Services, if earlier.
What penalty rate does the form state?
For both calendar year 2024 and calendar year 2025, the stated rate is .8333% per month or fraction of a month, compounded monthly.