Calculating Annualizing Estimated
Corporation Business Tax Installments and
Worksheet CT-1120 AE
Purpose: To explain an alternate method for calculating installments of estimated Connecticut corporation business tax for corporations that do not receive income evenly throughout the year (because more income was earned later in the year than in the early part of the year, or for any other reason). Under the annualized estimated corporation business tax installment method, the required installment for one or more periods may be less than the amount of the installment calculated using the regular installment method.
Effective Date: Upon issuance.
Statutory Authority: Conn. Gen. Stat. §12-242d, as amended.
Who Should Pay Estimated Corporation Business Tax?
Every corporation carrying on business or having the right to carry on business in Connecticut, whose current year tax exceeds $1,000 after applying corporation business tax credits, must pay estimated tax in four installments, or be subject to interest on the underpayment of estimated tax.
What is My Required Annual Payment?
Your required annual payment is the lesser of:
90% of the tax (including surtax and after tax credits) shown on the Connecticut corporation business tax return for the current income year, or if no return is filed, 90% of the tax for such year; or
100% of the tax (including surtax) shown on the Connecticut corporation business tax return for the previous income year without regard to tax credits, if the previous income year was an income year of 12 months and if the company filed a return for the previous income year showing a liability for tax.
When Should I File?
For calendar year filers, the estimated corporation business tax installments are due March 15, June 15, September 15, and December 15. Fiscal year filers should file estimated payments on or before the fifteenth day of the third, sixth, ninth, and twelfth months of the income year. If the due date falls on a Saturday, Sunday, or legal holiday, the next business day is the due date.
How Do I Calculate the Amount of Each Installment Using the Annualized Estimated Corporation Business Tax Installment Method?
Complete Worksheet CT-1120 AE on Page 4 of this publication. You must complete one entire column before continuing to the next column. Enter the amount from Line 19 of the appropriate column of the worksheet on Line 5 of Forms CT-1120 ESA, ESB, ESC, ESD or Forms CT-990T ESA, ESB, ESC, or ESD.
How Do I Pay My Estimated Corporation Business Tax?
Beginning in 2004, corporations can use Fast-File to electronically file Forms CT-1120 ESA, ESB, ESC, and ESD, and pay any estimated tax due. Fast-File is a quick, easy, and secure way to fulfill Connecticut tax responsibilities without paper or postage. Visit the DRS Web site at www.ct.gov/DRS and click on File Returns On-Line. Four preprinted estimated tax payment coupons with instructions will be mailed to companies that paid an estimated tax or whose Connecticut corporation business tax liability exceeded $1,000 in the prior income year. To ensure that the company’s payments are properly credited, be sure to use the preprinted coupons. Companies that do not receive preprinted estimated coupons should use the estimated coupons available on the DRS Web site.
What Happens If I Underestimate My Corporation Business Tax?
If the current year tax is more than $1,000 and the corporation does not make timely installments of its required annual payment, it will be charged interest on the underpayment. Interest will accrue on the amount of the underpayment until the earlier of the first day of the fourth month following the end of the income year, or the date on which the underpayment is paid.
Will Interest Apply If I Use The Annualized Estimated Corporation Business Tax Method?
Interest will not apply if the required installments are calculated correctly. Complete Worksheet CT-1120 AE, and make the required installment payments (using Forms CT-1120 ESA, ESB, ESC, ESD or Forms CT-990T ESA, ESB, ESC, or ESD) on or before the due dates.
May I Apply Overpayments In the Current Year to The Next Year’s Estimated Corporation Business Tax?
When the corporation’s current year return is filed, the corporation may apply overpayments of Connecticut corporation business tax to the estimated tax for the next succeeding income year. The request to apply overpayments to the next year's estimated tax is irrevocable, and the credit is established as of the date of the U.S. Postal Service cancellation mark on the completed return.
Effect on Other Documents: This Informational Publication 2003(37) supersedes Informational Publication 99(12.1) which may no longer be relied upon on or after the issuance date of this publication.
Effect of This Document: An Informational Publication addresses frequently asked questions about a current position, policy, or practice, usually in a less technical question and answer format.
For Further Information: Call DRS during business hours, Monday through Friday:
1-800-382-9463 (in-state), or
860-297-5962 (from anywhere)
TTY, TDD, and Text Telephone users only may transmit inquiries anytime by calling 860-297-4911.
Forms and Publications: Forms and publications are available anytime by:
Internet: Preview and download forms and publications from the DRS Web site at www.ct.gov/DRS
Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (in-state) and select Option 2 from a touch-tone phone.
Paperless Filing Methods (fast, easy, free, and confidential):
For business returns: Use Fast-File to file sales and use taxes, business use tax, room occupancy tax, or withholding tax returns over the Internet or telephone. Visit the DRS Web site at www.ct.gov/DRS and click on File Returns On-Line or call 860-947-1988.
For resident income tax returns: Use WebFile to file personal income tax returns over the Internet. Visit the DRS Web site at www.ct.gov/DRS and click on File Returns On-Line.
Corporation Business Tax