Types of corporations that must declare estimated tax and make quarterly installment payments

• general business corporation
• S corporation
• banking corporation
• insurance corporation
• utilities corporation
• transportation and transmission corporation
• and your franchise, gross receipts, or excise tax for the current tax year can reasonably be expected to be more than $1,000 after credits.

Mandatory first installment (MFI): You may have to make an MFI for next year of a percentage of your current year’s tax liability. For details, see the instructions for your tax return.

Penalty:  If you don’t pay the correct installment amounts on time, you’ll have to pay a penalty. You may qualify for an exception that could reduce or eliminate the penalty. The Tax Law does not allow a penalty waiver for reasonable cause.

If you do not calculate your penalty using an exception method, do not attach Form CT-222, Underpayment of Estimated Tax by a Corporation to your return and do not mark the box on the return indicating that Form CT-222 is attached. If you do not calculate a penalty and one is due, we will calculate the penalty for you using the standard method. For more information, see the instructions for Form CT-222.

To calculate the penalty:

1. Consider timely payments made on your behalf by a partnership to be estimated payments made by you.
2. Multiply by the number of days from the due date of the installment to the date paid, or to the 15th day or the third month of the tax year, whichever is earlier.
3. Divide by the number of days in the year.
4. Multiply by the applicable interest rate. (Daily compounding of interest does not apply.)

Exceptions used to eliminate or reduce penalty (do not reduce a mandatory first installment):

1. Adjusted seasonal installment method
2. Annualized income installment method
3. Prior year’s tax method
4. Current year’s tax rate with previous year’s information method

For an explanation of these exceptions, see Form CT-222 instructions. If you use an exception method to calculate your penalty you must: attach a properly completed Form CT-222 to your return; and mark the box on the return indicating that you attached Form CT-222.

You may not need to complete each Form CT-222 schedule

• Don’t complete Schedule A unless you’re using the adjusted seasonal method, annualized method, or both.
• Don’t complete Schedule B unless you’re using the current year’s rate with previous year’s information.

For more information, see the instructions for Form CT-222.