2220ME: Underpayment of Estimated Tax by Corporations or Financial Institutions (2025)
Maine · Maine Revenue Services · Used for tax years 2025
Maine Form 2220ME helps corporations and financial institutions determine whether they paid enough estimated tax by the required due dates for 2025. It calculates installment underpayments and any underpayment penalty and is enclosed with Form 1120ME or Form 1120B-ME.
Who files this form
Corporations and financial institutions use Form 2220ME to determine whether they paid enough estimated tax on time and whether they owe an underpayment penalty for 2025.
In general, you may owe a penalty if you did not pay, by the required due dates, the lesser of:
- 90% of your 2025 tax liability, or
- 100% of your 2024 tax liability, if your 2024 return covered 12 months.
You do not have to pay the penalty or file this form if either your 2025 tax liability, reduced by allowable credits, or your 2024 tax liability is less than $1,000.
Large corporations, as defined by IRC § 6655(g)(2)(A), must also meet the test required by 36 M.R.S. § 5228(5)(C).
When it's due
For the 2025 tax year, enter estimated tax installment due dates in columns A through D. The dates are the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year.
What you'll need
Have these records available to complete the form:
- Your 2025 Form 1120ME or Form 1120B-ME, including the name and FEIN shown on the return.
- Your 2024 tax liability and whether that return covered a full 12 months.
- Records of estimated tax payments and any carryover of a 2024 overpayment.
- Payment dates needed to calculate the period of any underpayment.
If you use actual liability for each installment instead of four equal installments, you need adequate records to establish that liability and the Annualized Income Installment Worksheet for Underpayment of Estimated Tax.
How to file
Enclose Form 2220ME with your Form 1120ME or Form 1120B-ME.
Complete Part I to calculate installment underpayments. If no exception applies for an installment date, complete lines 9 through 13 in 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
- Continuing when the form tells you to stop: If line 1 or line 3 is less than $1,000, do not complete the rest of the form.
- Using the wrong amount for a short 2024 tax year: If 2024 was a short year, enter the amount from line 2 on line 3.
- Using the rate table as a fiscal-year filer: Fiscal-year filers may not use the printed table.
- Putting a 2024 overpayment in the wrong column: On line 6a, use the column corresponding to the later of the 2024 return's due date, without regard to extensions, or the date of the payment that created the overpayment.
- Missing the actual-liability checkboxes: If using actual liability on line 5a, check that box and the box on Form 1120ME, line 9, and enter the amount from line 17 of the annualization worksheet.
- Adding punctuation to your FEIN: Do not enter slashes or hyphens.
Questions people ask
Can I avoid the penalty but still need to file Form 2220ME?
Yes. The penalty may be avoided if at least 90% of your 2025 tax was paid when due, even though you may still be required to file the form.
Must estimated tax payments be four equal installments?
Generally, yes. You may use actual liability for each required installment if you establish it with adequate records. Use the Annualized Income Installment Worksheet for Underpayment of Estimated Tax to determine actual liability.
How is the penalty calculated?
The penalty is based on the underpaid installment and the period of underpayment. For calendar year 2025, the rate is .8333% per month or fraction of a month, compounded monthly. For calendar year 2026, the rate is .75% per month or fraction of a month, compounded monthly.
What date ends the penalty calculation?
On line 9, enter the return's due date or the date the underpayment was paid to Maine Revenue Services, whichever is earlier.