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), Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, to figure their estimated tax. taxmap/pubs/p598-003.htm#en_us_publink100067453
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). taxmap/pubs/p598-003.htm#en_us_publink100067454
An exempt organization must deposit its unrelated business income tax (including estimated tax) using one of the following methods.taxmap/pubs/p598-003.htm#en_us_publink100067455
The organization must make electronic deposits of all depository taxes (such as employment tax, excise tax, and unrelated business income tax) using the Electronic Federal Tax Payment System (EFTPS) in 2010 if:
- The total deposits of such taxes in 2008 were more than $200,000 or
- The organization was required to use EFTPS in 2009.
If the organization is required to use EFTPS and fails to do so, it may be subject to a 10% penalty. If the organization is not required to use EFTPS, it can participate voluntarily. To enroll in or get more information about EFTPS, call 1-800-555-4477 or 1-800-945-8400. To enroll online, visit www.eftps.gov
For EFTPS deposits to be made timely, the organization must initiate the transaction at least 1 business day before the date the deposit is due.taxmap/pubs/p598-003.htm#en_us_publink100067457
If the organization is not required to (or does not voluntarily) make electronic deposits, it must make its deposits with Form 8109, Federal Tax Deposit Coupon.
The completed Form 8109 with the payment must be mailed or delivered to an authorized depositary (financial institution) for federal taxes, as instructed on the coupon.
Deposits should not be sent directly to the IRS. A penalty may be imposed if the deposits are sent to an IRS office rather than to an authorized depositary.