2220N: Corporation Underpayment of Estimated Tax (2024)
Nebraska · Nebraska DOR · Used for tax years 2024
Nebraska Form 2220N calculates underpayments of estimated tax and any related penalty for corporations, S corporations, and partnerships for 2024. It reports required installments, payments and credits, and is attached to Form 1120N, 1120-SN, or 1065N.
Who files this form
Corporations, S corporations, and partnerships must file 2024 Form 2220N when line 3, Nebraska tax after refundable credits, is $400 or more.
If line 3 is less than $400, do not complete the rest of the form. No penalty is owed.
For this rule, a corporate taxpayer includes entities taxed as corporations under the Internal Revenue Code, except S corporations and financial institutions defined in Nebraska Revised Statute § 77-3801. S corporations are separately included in the filing requirement.
When it's due
For the 2024 tax year, estimated tax installments are due on the 15th day of the 4th, 6th, 9th, and 12th months of your tax year. Enter these dates on line 6.
File Form 2220N with your Form 1120N, 1120-SN, or 1065N. The text does not give a specific calendar filing deadline for those returns.
What you'll need
Have these returns and records available to complete the form:
- Your 2024 Form 1120N, 1120-SN, or 1065N, including Nebraska tax after nonrefundable credits and refundable credit amounts.
- Your 2023 Nebraska return, if using prior-year tax or the 2023 school district property tax credit.
- Records of 2024 estimated tax payments and Nebraska income tax withheld, including payment dates.
- The amount of any 2023 income tax overpayment credited to 2024 estimated payments.
- Your Parcel ID Number, if using the Nebraska Property Tax Look-Up Tool to determine an eligible 2023 school district property tax credit.
If using the adjusted seasonal or annualized income installment method, recalculate Federal Schedule A using Nebraska income and other Nebraska amounts, and attach it.
How to file
Attach Form 2220N to your Nebraska Form 1120N, 1120-SN, or 1065N and file it with that return. The text does not provide a mailing address or e-file directions.
Enter the name shown on the tax return and the Nebraska ID number, and identify the return type. Check any applicable boxes for the adjusted seasonal installment method, annualized income installment method, or large corporation status.
Complete Part I to calculate underpayments. If line 14 shows an underpayment, complete Part II to calculate the penalty.
Transfer the total penalty from line 20 to:
- Line 32 of Form 1120N, or
- Line 29 of Form 1120-SN or 1065N.
Common mistakes
- Continuing when line 3 is below $400. The form says to stop. No penalty is owed.
- Using an ineligible prior-year tax amount. If the prior-year tax is zero or the prior tax year was shorter than 12 months, skip line 4 and enter line 3 on line 5. Large corporations have additional restrictions on using prior-year tax.
- Including older PTET amounts. Do not include PTET credits received for tax years 2018 through 2022 in line 4, or PTET payments made for those years in line 8.
- Completing rows across all columns first. Complete lines 8 through 15 for one column before moving to the next column.
- Using the wrong date format on paper. Enter dates on lines 6 and 17 in MMDDCCYY format.
- Filing Form 21 for the school district credit adjustment. If line 2 includes the school district property tax credit allowed on your 2023 return, the instructions say not to file a Request for Abatement of Penalty, Form 21.
Questions people ask
What penalty rates apply?
The penalty rate is 5% per year for days in 2024 and 8% per year for days in 2025. Line 19 uses the underpayment on line 16, the applicable rate, and the number of days on line 18 divided by 365.
Can another calculation method reduce the penalty?
Yes. The annualized income or adjusted seasonal installment method may reduce or eliminate the penalty. Recalculate and attach Federal Schedule A using Nebraska amounts, check the appropriate boxes, and enter the corresponding Schedule A amounts on line 7.
What counts as a large corporation?
A corporation other than an S corporation is a large corporation if it, or its predecessor, had federal taxable income of at least $1 million in any of the three immediately preceding tax years. This test disregards net operating loss and capital loss carrybacks and carryovers. A large corporation may use prior-year tax only for its first installment, and any resulting reduction must be recaptured in its second installment.
How are payments applied when an earlier installment is unpaid?
Estimated tax payments are applied to underpayments in the order the installments were due, regardless of which installment the payment was intended to cover.