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Instructions for Form NYC-222B - 2020 Page 3
PURPOSE OF FORM merely because its tax liability for ported on its prior year’s return. To
Form NYC-222B will enable sub- the preceding year was $1,000 or qualify for this exception, the cor-
chapter S banking corporations to less or it did not file a return for the poration must have filed an income
determine if they paid the correct preceding year. However, if the pre- tax return showing a tax liability
amount of estimated tax by the ceding year’s tax was less than for the prior year, and that taxable
proper due date. If the minimum $1,000, the taxpayer is not required year consisted of 12 months.
amount was not paid timely, an un- to make the 25% prepayment based
derpayment penalty may be imposed on the preceding year’s tax at the Exception 2 - Tax Based On
for the period underpaid. This form time it files its return (or its appli- Prior Year’s Facts and Law
helps you to determine whether or cation for extension of time for the Using Current Year’s Rates
not you are subject to this penalty. filing of the return) for that year. This exception applies if a sub-
chapter S banking corporation paid
ESTIMATED TAX EXCEPTIONS THAT an amount of estimated tax equal
Every subchapter S banking corpo- AVOID THE UNDERPAY- to a tax computed by applying the
ration subject to the New York City MENT PENALTY current year’s rates, to the facts
Tax on Banking Corporations must You will not have to pay a penalty shown on the return for, and under
pay, either with its return (Form if you made all tax payments on the law applicable to the prior tax-
NYC-1 or Form NYC-1A) or with time and they equal or exceed the able year. The term current“year’s
its Application for Automatic Ex- amount that would have been re- rate” is any of the four methods of
tension (Form NYC-EXT), an quired to be paid by each install- calculating the Banking Corpora-
amount equal to 25% of its preced- ment date if the estimated tax were tion Tax including the minimum
ing year’s tax if the preceding an amount determined under any tax.
year’s tax is more than $1,000. of the exceptions listed below.
Exception 3 - Tax On Annual-
In addition, corporations must file A different exception may be ap-
ized Income
a Declaration of Estimated Tax plied to each underpayment. If no
This exception applies if a banking
(Form NYC-400B) if the estimated exception applies, complete lines
corporation made an estimated tax
tax for the current taxable year 14 through 36 to determine the
payment of at least 90% of the
after all allowable credits can rea- amount of the penalty.
amount it would owe if its estimated
sonably be expected to exceed
tax were a tax computed on annual-
$1,000. The due date for the dec- NOTE: Large corporations (cor-
ized taxable income for the months
laration and the dates for paying porations that had allocated taxable
preceding an installment date.
the installments of estimated tax income or entire net income of $1
depend upon when the require- million or more in any of the three A subchapter S banking corpora-
ments for making a declaration are years preceding the current year) tion may annualize its income:
first met. (Refer to Form NYC- may not use exceptions 1 or 2.
a) for the first 3 months, or for the
400B for details.) Such corporations may only use
first 5 months if the installment
the exception for annualized in-
was required to be paid in the 6th
NOTE: If any date falls on a Sat- come, or the exception for recur-
month;
urday, Sunday or legal holiday, ring seasonal income (exceptions 3
substitute the next regular workday. or 4, respectively).
b) for the first 6 months, or for the
first 8 months, if the installment
NOTE: A subchapter S banking Exception 1 - Prior Year’s Tax
was required to be paid in the
corporation is not excused from fil- This exception applies if a sub-
9th month; and
ing a declaration and paying esti- chapter S banking corporation paid
mated taxes for the current year estimated taxes equal to the tax re- c) for the first 9 months, or for the
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