UltraTax CS: 1120 penalties

Alerts and notices

This topic covers late filing, late payment, late payment interest, and underpayment penalties for Federal Form 1120.

How do I start calculating penalties?

Penalties calculate automatically based on the date entered in the Payments folder > Pen tab Date return filed field. To ensure the correct calculations, enter the actual date the return was filed. If that field is blank, UltraTax assumes the return was filed on the original due date. Click here for more information about this input field.

How do I stop penalties from calculating?

To remove penalties, go to the Payments > Pen tab. Under Suppress penalties on return, mark the box next to the kind of penalty you want to suppress.

Where can I see the amount of penalties?

Late filing interest, failure to file (FTF), and failure to pay (FTP)

These penalties print at the bottom of Form 1120 page 1. For detailed calculations, go to the Form view, click the Late folder and review the Late Filing Penalties and Interest Worksheet.

Underpayment of estimated tax

Go to the Form view, click the 2220 folder and review Form 2220. Note that there is an Worksheet tab at the top of this form with additional calculations.

Why aren't penalties working the way I expect?

The filing deadline for some Corporate returns with taxable years beginning after Dec. 31, 2015 changed due to the FAST Act. If the return was not filed or extended on time, penalties apply. To see the due dates, click here. If you received a notice from the IRS, see Understanding Your CP162 Notice External link(What's this?)

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Per the IRS, an extension of time to file does not grant you any extension of time to pay. Therefore, failure to pay and late filing interest penalties may calculate on extended returns if no payment was made with the extension.

Check each one of the following bullet points:

  • For details on penalty calculations, check page 6 of IRS Publication 542 here External link(What's this?)
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  • Go to the Payments input folder > Pen tab, and look for the the Date return filed field. Penalties calculate based on that date, so verify the date is correct.
  • Go to the Payments folder > PmtExt tab.
    • Look for the Extended due date field at the bottom of the page. If the return was extended, enter the extended due date there. If the return was not extended, this field should be blank.
    • Look for the Paid with extension field. If a payment was sent with the extension, enter the payment amount.
  • UltraTax CS will calculate the previous two years of interest rates an no further. If you are filing a return older than 2 years, you will need to calculate the penalties manually.