IRS Form 2210 Instructions: Safe Harbors, Waivers, and Methods

The instructions for IRS Form 2210 come down to one decision before anything else: most people who owe an underpayment penalty do not need to file this form. Leave the estimated tax penalty line on your Form 1040 blank, and the IRS will calculate the penalty and send you a bill. You only fill out Form 2210 yourself if you’re checking one of the five boxes in Part II, and each box points to a different set of lines to complete.¹

Do You Need to File Form 2210 at All

Skip the form if none of these apply. Pay the IRS bill by the date shown on it and no additional interest accrues on the penalty.¹

File it if you’re checking one of the boxes in Part II:²

Box A: You’re requesting a waiver of the entire penalty. File page 1; don’t calculate the penalty.
Box B: You’re requesting a waiver of part of the penalty. Calculate both the full penalty and the waived portion.
Box C: Your income arrived unevenly and the annualized income installment method reduces or eliminates the penalty. Complete Schedule AI.
Box D: The penalty is lower if federal income tax withheld from your pay is treated as paid on the actual withholding dates rather than spread evenly.
Box E: You filed a joint return for one year but not the other, and it changes your required annual payment. File page 1; skip the calculation unless B, C, or D also applies.

The most common mistake is filing the form when you don’t need to, or figuring the penalty yourself when the IRS would have arrived at the same or a smaller number. When nothing in Part II applies, the simpler path is silence.

The $1,000 Threshold and Safe Harbors

Before working through the form, confirm you actually owe a penalty. There isn’t one if the tax you still owe after subtracting withholding and refundable credits is under $1,000.³

Above $1,000, you avoid the penalty if your withholding plus estimated payments totaled at least the smaller of:

90% of the current year’s tax, or
100% of the tax shown on the prior year’s return, provided that return covered a full 12 months.

The 100% figure rises to 110% if prior-year adjusted gross income was over $150,000, or over $75,000 if married filing separately.³ Miss both safe harbors, and a penalty accrues for each installment period you fell short.

How the Penalty Is Figured

The penalty isn’t a flat charge. It’s interest on each period’s shortfall, running from that installment’s due date until the earlier of the date you paid or the return’s due date. Each of the four periods is treated separately, so an early-year shortfall costs more than the same amount short late in the year.

The Four Installment Due Dates

Each required installment is 25% of your required annual payment, due on:⁴

April 15 (for income earned January 1 through March 31)
June 15 (April 1 through May 31)
September 15 (June 1 through August 31)
January 15 of the following year (September 1 through December 31)

When a due date falls on a weekend or legal holiday, it moves to the next business day.⁵ Any shortfall for one period carries into the next.⁶

The Interest Rate

The IRS sets the underpayment rate every quarter at the federal short-term rate plus three points, compounded daily. It’s 7% for the first quarter of 2026 and 6% for the second.⁷ The Part III, Section B penalty worksheet applies whatever rate was in effect during the specific days each payment was late, so a single filer can see two or three different rates across one year.

Once you’ve worked through the worksheet, total the four periods’ penalties, put the sum on line 19, and carry it to the estimated tax penalty line of your Form 1040 (line 38 on the 2025 return) or Form 1041 for an estate or trust.²

Box C: The Annualized Income Installment Method

The standard formula assumes you earned 25% of your income each quarter. If your income was lumpy, that assumption inflates the penalty. Check Box C and complete Schedule AI to recompute each period’s required installment based on income actually earned by the end of that period.³

Schedule AI is essentially four mini returns. You track income, deductions, and credits as of the close of each installment period, annualize the result, and derive a period-specific installment. If most of your income landed in the fourth quarter, Schedule AI will show you owed very little for the first three, and the penalty shrinks accordingly. It’s more work than the default method, but for seasonal earners, freelancers with irregular projects, and anyone who had a large late-year event, the reduction usually justifies the effort.

Box D: Actual-Date Withholding

By default, federal income tax withheld from wages is treated as paid in four equal amounts on the installment due dates, regardless of when the withholding actually happened. Box D lets you allocate withholding to the dates it actually occurred.²

This helps when withholding was concentrated late in the year, most often from a year-end bonus, stock option exercise, or large fourth-quarter commission. If $15,000 of your $20,000 in withholding came out in December, the default treatment makes it look like you underpaid the first three periods. Checking Box D and showing the true withholding dates can shrink or erase those earlier penalties. You then figure the penalty yourself and attach the form.

Boxes A and B: Requesting a Waiver

The IRS can waive all or part of the penalty in two narrow situations:³

The underpayment resulted from a federally declared disaster, casualty, or other unusual circumstance where imposing the penalty would be unfair.
You retired after reaching age 62 or became disabled in the tax year or the year before, and the underpayment was due to reasonable cause rather than neglect.

The general “reasonable cause” relief that removes many other IRS penalties does not apply to the estimated tax penalty.⁸ Those two categories are the entire menu.

For a full waiver, check Box A, file page 1, and attach a written statement covering the circumstances and the period involved. For a partial waiver, check Box B, compute the full penalty and the portion you believe should be waived, and attach the same kind of statement. Retirement or disability claims should include supporting documentation such as the retirement date or medical evidence.²

Farmers and Fishermen Use a Different Form

If at least two-thirds of your gross income for the current or prior year came from farming or fishing, Form 2210 isn’t yours. You use Form 2210-F, follow a single January 15 installment (which you can skip by filing and paying in full by March 1), and your required annual payment is 66⅔% of the current year’s tax rather than 90%. The 110% high-income override doesn’t apply.⁶⁹

What Goes on Your Return

If you calculated the penalty, put the line 19 total on the estimated tax penalty line of Form 1040 (line 38 for 2025) or Form 1041, and attach Form 2210. Include Schedule AI if you used the annualized method.²

If you checked only Box A or Box E, file page 1 of Form 2210 and skip the penalty calculation.¹ If nothing in Part II applies to your situation, don’t attach the form at all. Leave the penalty line blank and wait for the IRS to send its bill.

1
Internal Revenue Service. Instructions for Form 2210
2
Internal Revenue Service. Form 2210 – Underpayment of Estimated Tax by Individuals, Estates, and Trusts
3
Internal Revenue Service. Instructions for Form 2210 – Underpayment of Estimated Tax
4
Internal Revenue Service. Estimated Tax
5
Internal Revenue Service. Publication 509 (2026), Tax Calendars
6
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax
7
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
8
Internal Revenue Service. Penalty Relief for Reasonable Cause
9
Internal Revenue Service. Instructions for Form 2210-F – Underpayment of Estimated Tax by Farmers and Fishers