2210 - Frequently Asked Questions



Choose from the following Frequently Asked Questions about Form 2210: 


 

For what is Form 2210 used?

Form 2210 is used to calculate a penalty when the taxpayer has underpaid on their estimated taxes (quarterly ES vouchers). This penalty is different from the penalty for paying your taxes late. Form 2210 is not generated unless there is an underpayment and the form is required. See the Form 2210 Instructions for details. 

Notice 2019-55 changed the 2210 waiver guidelines for 2018. Per the IR-2019-55, "The IRS is lowering to 80 percent the threshold required to qualify for this relief. Under the relief originally announced Jan. 16, the threshold was 85 percent. The usual percentage threshold is 90 percent to avoid a penalty." The software automatically calculates and applies the revised thresholds in Drake18. 

Where in data entry can I produce Form 2210?

‚ÄčBy default, the software calculates the estimated tax penalty and displays it on line 79 of Form 1040. Form 2210 is not generated unless there is an underpayment and the form is required.

This default setting can be changed for a single return on screen 1 under 2210 Options, and the 2210 can also be forced to print by selecting the applicable code in the 2210 section on screen 1. If you select to force the 2210, but nothing produces, this is because the amount owed on the return is less than $1,000, therefore, no penalty calculates and the 2210 is not required. See Publication 505 for more information.

If you want to have the software mark the waiver option "1e" on Form 2210, "Reason for filing underpayment of estimated tax", select the most applicable check box in the upper left corner of the 2210 screen for the options in Part II, Reasons for Filing.

If the return was updated from the preceding year, unless you have entered a different amount, the field 20YY Fed tax contains the total federal tax due the preceding year (from line 63 of a 1040, for example). Similarly, the field 20YY State tax displays the equivalent tax due from the preceding year state return. Both the 20YY Fed tax and 20YY State tax fields on screen 1 will display as a green 'unverified field' if the return has been updated from the prior year. If you did not prepare the prior year return in Drake and update it to the current year, you can manually enter the prior year tax amount to have Form 2210 calculate, if needed. See Related Links below for information on clearing flagged/unverified fields. 

How do I suppress calculation of the underpayment penalty?

You can suppress an underpayment penalty on screen 1 in the return. Select code N from the 2210 Code drop list (bottom of the screen):

Code N will suppress Form 2210 in the event it is being produced. It will also produce the following note:

Why is a farmer's return producing a penalty on Form 2210, and it's not yet March 1st?

On the 2210 screen, you must check the Use form 2210F box and enter the Date Balance Paid. Penalty is avoided if the balance is paid on or before March 1st of the processing year. For the 2018 tax year, the IRS has extended this deadline to April 15, 2019.