As a startup CFO going through your first full tax year, a controller managing multiple entities, or an accountant serving several corporate clients, you must get the fourth-quarter payment right to avoid penalties.

Unfortunately, corporate estimated taxes involve more than just writing a check. You need accurate projections, proper IRS forms, electronic payment systems with unforgiving deadlines, and solid documentation for future audits.

This guide eliminates the guesswork. You'll master the complete process, including how to:

• Calculate your exact liability using Form 1120-W worksheets and safe harbor rules
• Schedule payments correctly through EFTPS
• Document everything to defend your calculations if the IRS comes calling

By the end, you'll be able to handle the December payment and understand the system for all future quarters.

An Overview of Estimated Tax for C Corporations

C corporations operate under a pay-as-you-go tax regime. Rather than waiting until year’s end to settle their full federal income tax, they make quarterly estimated tax payments throughout the tax year.

These installments help ensure tax liability is covered as income is earned or profits accrue, thereby reducing the burden of a lump-sum payment and minimizing underpayment penalties.

Who Needs to Make Estimated Payments?

A C corporation must make estimated tax payments if it expects its total income tax liability (after credits) for the year to be $500 or more when its return is filed. This threshold ensures that only corporations with meaningful tax exposure must spread payments across the year.

For example, our blog post on Form 1120W notes that corporations anticipating taxable obligations of $500+ should monitor and plan quarterly payments.

If a corporation’s estimated tax liability is under $500, it may avoid the estimated-payment requirement, though this exemption should be assessed carefully each year.

Calendar-Year Vs. Fiscal-Year Corporations

Most C corps adopt a calendar year (January 1 to December 31). For those entities, the four quarterly estimated payments are due on:

• April 15
• June 15
• September 15
• December 15

These dates reflect the 15th day of the 4th, 6th, 9th, and 12th months of the tax year.

For fiscal-year corporations (i.e., those with a non-December year-end), the deadlines still align with those same four installment months, but are changed relative to the fiscal year.

Thus, if your company’s fiscal year ends in June, your four payments would fall due on the 15th day of October (4th), December (6th), March (9th), and June (12th).

In a nutshell, the concept of four quarterly payments remains the same; the exact calendar months just rotate depending on your year-end.

Once you have all of those elements, you can log into EFTPS, enter the payment details, schedule the debit (ensuring the date is December 15, 2025, or the appropriate due date), confirm, and retain your EFT Acknowledgment Number for your records.

Since the deadline is strictly enforced by the system, double-check every field (especially EIN, bank routing, tax code, and date) before you submit to avoid rejections or late classification.

Form 1120-W: Purpose and When to Use It

Form 1120-W is a planning worksheet (not submitted to the IRS) that helps a corporation estimate its tax liability and structure its quarterly estimated tax payments. While you do not file Form 1120-W with your return, it is a critical internal tool.

You can access the worksheet PDF and official instructions on the IRS website (see “Forms, instructions and publications” for 1120-W).

When to Use Form 1120-W

Corporations (especially C corporations) that expect to owe $500 or more in federal income tax (after credits) for the year are generally required to make estimated tax payments. Use 1120-W early in the year (or at the start of a fiscal period) to project your taxable income, credits, and payments.

As noted in our guide on corporate tax deadlines, many C-Corp startups use this kind of projection in the first quarter to ensure timely quarterly installment planning.

Starting tax year 2023, the IRS has moved away from requiring 1120-W in its historical form. Many corporations now rely on the Estimated Tax Worksheet in IRS Publication 542 or similar tools instead of a standalone 1120-W.

Step-by-Step Walkthrough of the Worksheet

Here’s a structured way to approach 1120-W or your equivalent corporate estimated tax worksheet:

Gather Your Inputs

Before you begin filling in lines, gather the following:

• Projected taxable income for the full year (based on budgets, past performance, forecasts)
• Estimated deductions and adjustments (e.g., depreciation, interest, charitable contributions, etc.)
• Tax credits you plan to claim (e.g., foreign tax credit, R&D credits, etc.)
• Year-to-date tax payments or credits already made (such as withholding or prior installments, if applicable)
• Any additional taxes (e.g., base erosion tax, recapture, alternative minimum tax (if relevant))

Once you have these, you can proceed line by line.

Key Lines and Flow

While the exact line numbers may differ by year, a typical 1120-W-style worksheet uses the following flow (based on historical IRS versions):

• Line 1: Enter your estimated taxable income for the year.
• Line 2: Apply the corporate tax rate (currently flat 21%) to that income to derive tentative tax.
• Line 3: Subtract any nonrefundable credits (e.g., general business credits).
• Line 4/ Additional Lines: Add in other taxes (e.g., recapture taxes, base erosion, or alternative minimum tax if applicable).
• Line 5+: Subtract refundable credits or other credits (fuel credits, etc.).
• Line 6 / 7: Arrive at estimated net tax liability.
• Line N: Subtract any payments already made or credits available year to date.
• Final Line: This is your net estimated tax to be paid over the year.
• Installment Section / Schedule A: Break that figure into four quarterly required installments (or use an annualized income method or adjusted seasonal method), depending on cash flow.

How to Pay through EFTPS

EFTPS (Electronic Federal Tax Payment System) is the IRS’s free, secure, and reliable platform for making federal tax payments, including estimated corporate taxes. It enables you to schedule payments in advance, track your payment history, and obtain confirmation numbers for audit trails.

Paying through EFTPS helps businesses simplify recurring obligations and reduce risks associated with manual check processing or delays.

You must enroll in EFTPS before you can make payments. New enrollments usually require 5 to 7 business days for processing, as the system mails you a PIN to your business address. If you recently obtained your EIN, you may already be pre-enrolled; just activate your account when you receive the PIN.

Here’s how to schedule your estimated tax payment through EFTPS:

Log in (or enroll)

• Go to eftps.gov and click “Log In” (or “Enrollment” if not already enrolled).
• Enter your EIN, the PIN you received by mail, and your Internet password (you’ll be prompted to set one on first login).

Choose payment type

• Select “Estimated Tax” (or “Corporate Estimated Tax”) as your tax type.
• Indicate Form 1120 (or the corresponding tax code for corporate income) so the IRS applies it properly.

Enter details

• Input the tax year (e.g., 2025), payment amount, and tax period ending date (for December, this would typically be 12/31/2025).

Schedule payment

• Pick the future date when you want the payment to be debited.
• Payments must be scheduled by 8 p.m. ET the day before the due date to be considered timely.
• To be safe, schedule at least one business day earlier than the deadline.

Review and confirm

• Carefully review all details (tax type, period, amount, and bank info).
• Confirm and submit the payment instruction.
• You’ll receive an EFT acknowledgment number. Print (or save) this for your records.

Calculating the Right Amount and Safe Harbor Rules

Safe Harbor for C Corporations

To avoid underpayment penalties, C corporations must meet a safe harbor threshold for estimated taxes. Under IRC § 6655, the “required annual payment” is the lesser of:

• 100 % of the tax shown on the current year’s return, or
• 100 % of the tax shown on the prior year’s return (if it was a full 12-month return)

That means, if you base your installments on last year’s tax liability, and you end up owing less or more in 2025, you generally avoid a penalty so long as your payments matched those prior-year levels.

For many corporations, using last year’s tax as the anchor is the safest path. It simplifies planning and gives a cushion against misestimating a high current year. Our guide on Form 1120-W will help you understand this approach better.

Adjusting Estimates Mid-Year

Businesses rarely stay on a fixed growth path. When actual income deviates from your projection, you should revisit and revise your Form 1120-W worksheet midyear. Here's how to respond:

• Recompute your expected full-year taxable income using new information (sales, expenses, credits).
• Reallocate remaining payments. Subtract what you've already paid, and divide the remainder across the remaining quarters, or adjust more heavily toward one period if income is skewed.
• Schedule the revised payments via EFTPS, ensuring they remain timely under the 8 p.m. ET rule.
• Document all versions of your worksheets: the original estimate, interim revisions, and rationale (to support audit defense).

If your revised estimate is substantially lower, you may reduce future payments, but be careful not to drop below safe harbor thresholds.

The table below illustrates example scenarios and what to do in each situation:

Simplify C-Corp Estimated Tax Compliance Without Hiring Full-Time Finance Staff

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By delegating finance operations to specialists, you eliminate the risk of underpayment penalties, maintain audit-ready documentation, and free yourself to focus on product development and revenue growth. Most startups waste 40+ hours monthly on operational tasks that could be handled by experienced professionals.

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FAQs

When is the December 2025 estimated tax payment due for C-Corporations?

For calendar-year C-Corporations, the fourth estimated tax payment is due on Monday, December 15, 2025. If the 15th falls on a weekend or federal holiday, the deadline moves to the next business day. Corporations using a fiscal year must make their fourth payment on the 15th day of the 12th month of their fiscal year.

Do all C-Corporations need to pay estimated taxes quarterly?

Yes, most C-Corporations must pay estimated taxes if they expect to owe $500 or more in tax for the year. Payments are due quarterly in April, June, September, and December. However, certain special entities (like seasonal corporations, farmers, or fishermen) may have different rules or reduced schedules.

What is IRS Form 1120-W used for?

Form 1120-W  is a worksheet that helps corporations calculate their estimated tax liability for each quarter. It isn’t filed with the IRS; rather, it guides businesses in determining how much to pay each quarter via EFTPS or another approved method.

How do I pay my corporation’s estimated taxes?

The easiest and most reliable way to pay your C-Corporation’s estimated taxes is through the Electronic Federal Tax Payment System (EFTPS). Here’s how to do it step by step:

• Enroll in EFTPS (if you haven’t already) at eftps.gov. You’ll need your EIN, business banking details, and contact information.
• Log in and choose the payment type “Estimated Tax – Form 1120.”
• Enter your tax period and amount (for example, “12/31/2025” for the December 2025 quarterly payment).
• Schedule your payment date. To be considered on time, EFTPS payments must be scheduled no later than 8:00 p.m. Eastern Time on the business day before the due date.
• Confirm and print your receipt. Keep the confirmation number for your records; it’s your proof of timely payment.

How can I prepare for the next estimated tax cycle in 2026?

To stay compliant and avoid last-minute stress, start preparing for the 2026 C-Corp estimated tax cycle early. Here’s how to stay ahead:

• Analyze your year-end income, deductions, and credits to project your 2026 taxable income accurately.
• Update your estimated tax worksheet whenever your business income or deductions change significantly.
• Mark your 2026 due dates (1st payment: April 15, 2026; 2nd payment: June 15, 2026; 3rd payment: September 15, 2026; 4th payment: December 15, 2026). If any date falls on a weekend or holiday, pay by the next business day.
• Schedule EFTPS payments in advance. Set up or pre-schedule your quarterly payments at eftps.gov to ensure on-time processing.
• Align estimated tax payments with cash inflows to avoid liquidity issues.
• Tax laws and corporate deductions can change annually; a professional can help you adjust your estimates correctly.