In general, estimated tax installment payments are due on or before the 15th day of the 4th, 6th, 9th, and 12th months of the current tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the installment deadline is extended to the next regular business day.

Even if a corporation has duly filed an application for an extension of time to file its corporate income tax return, the due dates for its estimated tax installments remain unchanged. Generally, no extension of time to pay the installment payments is granted unless the corporation can establish undue hardship. See IRC §6655(f).

Generally, you may use either of the following two methods to calculate the estimated tax due for each installment period. You should use the method that results in the smaller estimated tax amount.

The estimated tax payable for each period equals 25% of the estimated income tax corresponding to the company's annualized profit, calculated using the annualized income installment method.

When a corporation fails to pay its estimated tax in full by the quarterly due date, the IRS will impose an underpayment penalty on the underpaid amount. The essence of this penalty is interest calculated on a daily basis, rather than a one-time fine.

Important Note: Even if a company incurs a net operating loss at the end of the fiscal year, it may still be subject to a penalty for underpayment of tax if the following conditions are met: