Form 63-22 - Premium Excise Return For Domestic Insurance Companies

Form 63-22 Instructions

Who Must File Form 63-22?

Reproduction of returns must be approved by the DOR prior to filing

and meet the criteria provided in Technical Information Release 95-8.

All domestic insurance companies subject to MGL Ch. 63, secs. 22

and 22A must file Form 63-22. Life insurance companies and ocean

Failure to meet any of the requirements detailed in this section may

marine business companies are not required to file this form.

result in a penalty for filing an insufficient return. Such a penalty may

be assessed at double the amount of the tax due.

A domestic company is a company incorporated or formed in the

Commonwealth.

When Are Estimated Tax Payments Required?

When Must Form 63-22 be Filed?

Any insurance company which reasonably estimates its excise to be

in excess of $1,000 for the taxable year is required to make estimated

Form 63-22, together with payment in full of any excise due, must be

tax payments to the Commonwealth. Estimated taxes may be paid in

filed on or before the 15th day of the third month after the close of the

full on or before the 15th day of the third month of the company’s tax-

company’s taxable year.

able year or in four installment payments according to the schedule

May an Insurance Company Obtain an Extension

below. Insurance companies making estimated payments must use

of Time to File?

Form 355-ES to make their payments.

Yes. Form 63-22 filers may request a six-month extension of time to

For taxable years ending on or after December 31, 1989, estimated

file by submitting Massachusetts Form 355-7004 Misc. on or before

tax installments are paid as follows:

the original due date. Any tax due at the time of filing Form 355-7004

Misc. must be paid in full.

% of

estimated

Due date from start

Note: An extension of time to file is not valid if the company fails to

Installment no.

tax due

of taxable year

pay at least 50% of the total tax liability through estimated payments

or using Form 355-7004 Misc.

40%

15th day of 3rd month

25%

15th day of 6th month

What Are the Penalties for Late Returns?

25%

15th day of 9th month

Insurance excise returns that are not filed on or before the due date

10%

15th day of 12th month

are subject to interest and penalty charges. The penalty for failure to

¹ ₂% of the balance due per

pay the amount due with this form is

Note: New corporations in their first full taxable year with less than 10

month (or fraction thereof), up to a maximum of 25% of the tax re-

employees have different estimated payment percentages — 30%,

ported as due on the return. A late payment penalty does not apply to

25%, 25% and 20% respectively.

amended returns when the amount shown on the original return was

Special Optical Character Readable payment vouchers are mailed to

paid.

all companies that have made estimated payments or should be

The penalty for failure to file a return by the due date is 1% of the bal-

making estimated payments. These special forms are easier to fill out

ance due per month (or fraction thereof), up to a maximum of 25%.

and facilitate processing.

Any tax not paid on or before the due date — without regard to the

Insurance companies that underpay, or fail to pay, their estimated

extension — is subject to interest.

taxes may incur an additional penalty on the amount of the underpay-

ment for the period of the underpayment. Form M-2220, Underpay-

What Is a Valid Return?

ment of Massachusetts Estimated Tax by Corporations, is used to

A valid return is one upon which all required amounts have been en-

compute the additional charge.

tered in all appropriate items on the form. Applicable forms and docu-

ments may be attached to explain these amounts. Referencing items

Any corporation having $1 million or more of federal taxable income

to attachments instead of properly entering all amounts onto the re-

in any of its three preceding taxable years (as defined in Section

turn is not sufficient. The return must be signed by either the trea-

6655 (g) of the IRC) may only use its prior year’s tax liability to calcu-

surer or assistant treasurer of the company.

late its first quarterly estimated tax payment. Any reduction in the first

installment payment that results from using this method must be

To be valid, Form 63-22 must also include the following:

added to the second installment payment.

• a copy of Schedule T, Exhibit of Premiums Written from the NAIC

A company that claims the exception to the underpayment penalty of

Annual Statement;

equaling the prior year’s tax liability must provide federal tax returns

• a copy of the Underwriting and Investment Exhibit, Form 2, Part I —

(front page only) for the three preceding taxable years to verify that

Interest, Dividends and Real Estate Income, from the NAIC Annual

federal taxable income is less than $1 million.

Statement; and

Note: Any insurance company required to file more than one type of

• a statement from those companies who are members of the Mass-

excise return must also file separate estimated tax payment vouchers

achusetts Property Insurance Underwriting Association (“Fair Plan”)

since each type of tax is governed by a different section of the Mass-

and/or Crime Insurance Program. The statement must indicate the

achusetts General Laws.

amounts disbursed, the percentage of participation, the policy year

For more information on corporate estimated taxes, refer to MGL,

and whether the premiums associated with the disbursement were

Chapter 63B.

included on Schedule T of the NAIC Annual Statement.

• a Certificate of Contribution from the Property and Casualty Initiative

from those companies claiming a lower tax rate and those compa-

nies claiming a retaliatory surtax credit.

Form 63-22 - Premium Excise Return For Domestic Insurance Companies - 2001 Page 3

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