Form 1120-W: How corporate estimated tax payments are made

UPDATE: As of tax year 2023, Form 1120-W, Estimated Tax For Corporations, is no longer used to calculate the estimated tax due. The article below should only be referenced for historical context and background.

Because our tax system is pay as you go, many corporations need to consider using Form 1120-W as part of making estimated tax payments. Read on to learn about this form, who should use it, why it matters, and how to fill it out here!

What is form 1120-W?

Form 1120-W is described in its official title, “Estimated Tax For Corporations”. It’s a tax worksheet used to determine required installments of estimated tax payments for corporations. Form 1120-W is different than IRS Form 1120 and IRS Form 1120-S, which are used to file annual returns.

Who should make estimated tax payments via 1120-W?

If your business is structured as a corporation and expected to make income that would exceed $500 in taxes per year (income tax less credits), you should use Form 1120-W to estimate your quarterly tax payments.

Some estimated payments made by S corporations are filed on Form 1120-W, while C corporations use IRS Form 1120 to file tax returns. S corporations should see the main IRS Form 1120-S instructions to determine if they need to make payments on Form 1120-W.

1120-W instructions

This tax form isn’t actually due to the IRS. Instead, it should be kept by the corporation filling out the form.

But, completing Form 1120-W is important as a corporation owner, as it helps you calculate your estimated payments. Completing this form matters because it helps regulate your cashflow, while also making sure you stay on top of your tax obligations.

Need help? A Block Advisors certified small business tax pro can add this service to your tax prep for a nominal extra fee. They will review your unique situation and suggest changes to your quarterly amount.

Here we walk you through the 1120-W instructions:

• Lines 1 and 2: Multiply the expected taxable income from line 1 by 21% (the flat tax rate for corporations.) Then, enter this amount on line 2.
• Line 3: Apply tax credits your corporation can take
• Line 5: Factor in other taxes, including base erosion minimum tax amount and any recaptured tax credits.
• Line 7: Add a tax credit for federal taxes paid on fuels and other refundable credits, if applicable.
• Line 9a: Figure out your tax in the same fashion that line 8 of this worksheet was calculated, using the taxes and credits from your current tax year income tax return.
• Line 10: Enter the tax quarter installment due dates in this section.
• Line 11: Enter the required installments calculated on Schedule A using the annualized income installment method or the adjusted seasonal installment method. The method you use depends on if your cash flow is more seasonal or consistent.

If you decide to use the “Adjusted Seasonal Installment Method” or the “Annualized Income Installment Method” on line 11, complete Schedule A.

Schedule A – Adjusted Seasonal Installment Method

• Part 1: Adjusted Seasonal Installment Method – Fill out each line to figure out adjusted seasonal installment for payment
• Part 2: Annualized Income Installment Method – Fill out each line to determine annualized income
• Part 3: Required Installments – Fill out each line to determine required installments for payment

When to make estimated tax payments

Thinking you need to file estimated tax payments? Your payments will be due on the corporate tax deadline dates below, unless the date falls on a weekend or holiday. If that’s the case, they’ll be due the next business date.

• April 15
• June 15
• September 15
• December 15

How to make Form 1120-W estimated tax payments

Corporations must use electronic fund transfer (EFT) to make all federal tax payments—that includes estimated taxes on Form 1120-W. You can use the Electronic Federal Tax Payment System (EFTPS), which is a free option from the Department of Treasury.

Other options include a wire transfer or a third-party initiated electronic deposit (done on your behalf).

Where can you turn to for help with the form for corporate estimated tax payments?

Are you a corporation needing help completing Form 1120-W to understand your estimated tax filing obligations? Block Advisors is here for you.

Rely on our team of small business certified tax pros to keep your business on track. Make an appointment now!