Form 63-20-23 Instructions
Who Must File Form 63-20-23?
below. Insurance companies making estimated payments must use
Form 355-ES to make their payments.
All classes of foreign life insurance companies on accident and
health business subject to MGL Ch. 63, secs. 23, 24 and 24A must
For taxable years ending on or after December 31, 1989, estimated
file Form 63-20-23.
tax installments are paid as follows:
All foreign life insurance companies subject to MGL Ch. 63, secs. 20,
% of
21 and 24A must file Form 63-20-23.
estimated
Due date from start
Installment no.
tax due
of taxable year
A foreign company is any company organized or formed in any state
or country other than Massachusetts.
1
40%
15th day of 3rd month
2
25%
15th day of 6th month
When Must Form 63-20-23 be Filed?
3
25%
15th day of 9th month
Form 63-20-23, together with payment in full of any excise due, must
4
10%
15th day of 12th month
be filed on or before the 15th day of the third month after the close of
the company’s taxable year.
Note: New corporations in their first full taxable year with less than
10 employees have different estimated payment percentages — 30%,
May an Insurance Company Obtain an Extension
25%, 25% and 20% respectively.
of Time to File?
Special Optical Character Readable payment vouchers are mailed to
Yes. Form 63-20-23 filers may request a six-month extension of time
all companies that have made estimated payments or should be mak-
to file by submitting Massachusetts Form 355-7004 Misc. on or before
ing estimated payments. These special forms are easier to fill out and
the original due date. Any tax due at the time of filing Form 355-7004
facilitate processing.
Misc. must be paid in full.
Insurance companies that underpay, or fail to pay, their estimated
Note: An extension of time to file is not valid if the company fails to
taxes may incur an additional penalty on the amount of the under-
pay at least 50% of the total tax liability through estimated payments
payment for the period of the underpayment. Form M-2220, Under-
or using Form 355-7004 Misc.
payment of Massachusetts Estimated Tax by Corporations, is used to
What Are the Penalties for Late Returns?
compute the additional charge.
Insurance excise returns that are not filed on or before the due date
Any corporation having $1 million or more of federal taxable income
are subject to interest and penalty charges. The penalty for failure to
¹ ₂% of the balance due per month
in any of its three preceding taxable years (as defined in Section
pay the amount due with this form is
6655(g) of the Internal Revenue Code (IRC)) may only use its prior
(or fraction thereof), up to a maximum of 25% of the tax reported as
year’s tax liability to calculate its first quarterly estimated tax pay-
due on the return. A late payment penalty does not apply to amended
ment. Any reduction in the first installment payment that results from
returns when the amount shown on the original return was paid.
using this method must be added to the second installment payment.
The penalty for failure to file a return by the due date is 1% of the bal-
A company that claims the exception to the underpayment penalty of
ance due per month (or fraction thereof), up to a maximum of 25%.
equaling the prior year’s tax liability must provide federal tax re-
Any tax not paid on or before the due date — without regard to the
turns (one page only) for the three preceding taxable years to verify
extension — is subject to interest.
that federal taxable income is less than $1 million.
What is a Valid Return?
Note: Any insurance company required to file more than one type of
A valid return is one upon which all required amounts have been entered
excise return must also file separate estimated tax payment vouchers
in all appropriate items on the form. Applicable forms and documents
since each type of tax is governed by a different section of the Mass-
may be attached to explain these amounts. Referencing items to at-
achusetts General Laws.
tachments instead of properly entering all amounts onto the return is
For more information on corporate estimated taxes, refer to MGL,
not sufficient. The return must be signed by either the treasurer or
Chapter 63B.
assistant treasurer of the company.
How Is the Excise Determined?
To be valid, a Form 63-20-23 must also include a copy of Schedule T,
Foreign Accident & Health insurance companies are taxed on net di-
Exhibit of Premiums Written or Form 1 from the NAIC Annual Statement.
rect premiums for insurance of property or interest in Massachusetts.
Reproduction of returns must be approved by DOR prior to filing and
Foreign life insurance companies are taxed on all new and renewal
meet the criteria provided in Technical Information Release 95-8.
policies issued during the preceding calendar year if the insured is a
Failure to meet any of the requirements detailed in this section may
resident of Massachusetts at the time the premium was paid.
result in a penalty for filing an insufficient return. Such a penalty may
Are Combined Returns Allowed?
be assessed at double the amount of the tax due.
No. Foreign insurance companies are not allowed to participate in fil-
When are Estimated Tax Payments Required?
ing combined returns.
Any insurance company that reasonably estimates its excise to be in
Line Instructions
excess of $1,000 for the taxable year is required to make estimated
tax payments to the Commonwealth. Estimated taxes may be paid in
Registration Information
full on or before the 15th day of the third month of the company’s tax-
Enter the company’s federal employer identification number and the
able year or in four installment payments according to the schedule
state of incorporation next to the name and address of the company.