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Publication 598

Payment of Tax(p3)


Estimated tax.(p3)

A tax-exempt organization must make estimated tax payments if it expects its tax (unrelated business income tax after certain adjustments) to be $500 or more. Estimated tax payments are generally due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day.
Any organization that fails to pay the proper estimated tax when due may be charged an underpayment penalty for the period of underpayment. Generally, to avoid the estimated tax penalty, the organization must make estimated tax payments that total 100% of the organization's current tax year liability. However, an organization can base its required estimated tax payments on 100% of the tax shown on its return for the preceding year (unless no tax is shown) if its taxable income for each of the 3 preceding tax years was less than $1 million. If an organization's taxable income for any of those years was $1 million or more, it can base only its first required installment payment on its last year's tax.
All tax-exempt organizations should use Form 990-W (Worksheet), to figure their estimated tax.

Tax due with Form 990-T. (p3)

Any tax due with Form 990-T must be paid in full when the return is filed, but no later than the date the return is due (determined without extensions).

Federal Tax Deposits Must be Made by Electronic Funds Transfer(p3)


Electronic Deposit Requirement. (p3)

The organization must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically. Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at, or call 1-800-555-4477, 1-800-733-4829 (TDD), or 1-800-244-4829 (Spanish). You can also get Pub. 966, Electronic Federal Tax Payment System: A Guide to Getting Started.

Depositing on time. (p3)

For EFTPS deposits to be made timely, the organization must initiate the deposit by 8 p.m. Eastern time the day before the deposit is due.

Same-day wire payment option. (p3)

If you fail to initiate a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA), a same-day federal tax payment system that works in conjunction with EFTPS. Make arrangements with your financial institution ahead of time, noting the institution's availability, deadlines, and costs, if you believe you would ever need the same-day wire payment option. To learn more, visit www.same-day-wire-federal-tax-payments and also download the Same-Day Payment Worksheet.

Timeliness of deposits. (p3)

Beginning January 1, 2011, the IRS will use business days to determine the timeliness of deposits. Business days are any day that isn't a Saturday, Sunday or legal holiday in the District of Columbia. To provide transitional relief for 2012, the IRS won't assert penalties for federal tax deposits that are untimely solely because the depositor used a statewide legal holiday instead of a District of Columbia legal holiday. See Notice 2010-87, 2010-52 I.R.B. 908, available at www.2010-52_IRB. See Pub. 583, Starting a Business and Keeping Records.
If the organization owes tax when it files Form 990-T, don't include the payment with the tax return. Instead, use EFTPS.