Calculating IRS 990-T Form 2220 Penalties in 990 Tracker

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Calculations Prior to 2023 Tax Year

For Tax Years 2022 and prior, the system calculates the underpayment penalty strictly using the calculation on Part IV and payment dates entered on Part IV, Line 19.

However, as per IRS instructions, if there are multiple payment dates for a required installment, a separate computation is required.

Taxpayers falling under this fact pattern prior to TY 2023 will need to calculate the separate computation offline and use the override the penalty on Part IV, Line 38

Calculations for Tax Year 2023 and Later

Beginning in Tax Year 2023, there is a new worksheet option to assist taxpayers when there is more than one payment date for a required installment. This new worksheet will calculate the separate computation and fill Part IV, Line 38 with based on the updated computation method.

Circular 230 Disclosure

To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this software (including any reports or downloads) is not intended or written to be used and cannot be used for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) supporting, promoting, marketing or recommending to another party any transaction or matter addressed herein. This software is for informational purposes only and should not be regarded as tax advice. Please consult your tax advisor or attorney for guidance on your individual tax situation.

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