U. S. Business Income Tax Return

2026

Instructions for Form 8804-W
(WORKSHEET)
Installment Payments of Section 1446 Tax for Partnerships
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments
For the latest information about developments related to
Form 8804-W and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form8804W.

General Instructions
Purpose of Form

Partnerships that have effectively connected taxable
income (ECTI) allocable to foreign partners can use the
Form 8804-W (WORKSHEET) to determine the proper
estimated section 1446 tax payments.

Who Must Make Estimated Section
1446 Tax Payments

Partnerships must generally make installment payments of
estimated section 1446 tax if the aggregate tax on the
ECTI that is allocable to all foreign partners will be $500 or
more.

When To Make Estimated Section
1446 Tax Payments

The installments are due by the 15th day of the 4th, 6th,
9th, and 12th months of the partnership’s tax year. If any
date falls on a Saturday, Sunday, or legal holiday, the
installment is due on the next regular business day.

Underpayment of Estimated Section
1446 Tax

A partnership that doesn’t make estimated section 1446
tax payments when due may be subject to an
underpayment penalty for the period of underpayment.
See Schedule A (Form 8804) for details.

How To Make Estimated Section 1446
Tax Payments

A partnership that is required to make an installment
payment of section 1446 tax may submit payment by filing
Form 8813, Partnership Withholding Tax Payment
Voucher (Section 1446), with a check or money order, or
transmit payment through the Electronic Federal Tax
Payment System (EFTPS). If using EFTPS, Forms 8804
and 8805 must still be filed (and Form 8813, as
applicable). See instructions to Forms 8804 and 8804-C.
For more information on EFTPS, go to EFTPS.gov.
Oct 23, 2025

Furthermore, the partnership is generally required to
notify each foreign partner of the section 1446 tax paid on
the partner’s behalf within 10 days of the installment
payment due date or, if paid later, the date the installment
payment is made. See Regulations section 1.1446-3(d)(1)
(i) for information that must be included in the notification
and for exceptions to the notification requirement.

Refiguring Estimated Section 1446
Tax

If, after the partnership figures and makes an installment
payment of estimated section 1446 tax, it finds that its
section 1446 tax liability for the year will be more or less
than originally estimated, it may have to refigure its
required installments. If earlier installments were
underpaid, the partnership may owe a penalty for
underpayment of estimated tax. An immediate catch-up
payment should be made to reduce the amount of any
penalty resulting from the underpayment of any earlier
installments, whether caused by a change in estimate,
failure to make a payment, or a mistake.

Specific Instructions
Part I—Determination of Installment
Payments

Complete Form 8804-W for each installment payment of
section 1446 tax based on the information available at the
time of the installment payment.

Lines 1 Through 6—Current-Year Safe Harbor
Lines 1a, 1e, 1i, 1m, and 1q. To determine the allocable
share of ECTI for all foreign partners, see Effectively
Connected Taxable Income in the Instructions for Forms
8804, 8805, and 8813. Enter on lines 1i, 1m, and 1q the
specified types of ECTI allocable to those partners who
would be entitled to use a preferential rate on such income
or gain (see Regulations section 1.1446-3(a)(2)). For
tiered partnerships, see Regulations section 1.1446-5.
A partner may be entitled to use a preferential rate on
the following types of income or gain.
1. Line 1i—See section 1(h)(4) and the instructions for
Schedule D (Form 1040), line 18, for more information
regarding 28% rate gain.
2. Line 1m—See section 1(h)(6) and the instructions
for Schedule D (Form 1040), line 19, for more information
regarding unrecaptured section 1250 gain.
3. Line 1q—Adjusted net capital gain is net capital
gain, as defined in section 1222(11), reduced (but not

Instructions for Form 8804-W (2026) Catalog Number 51675X
Department of the Treasury Internal Revenue Service www.irs.gov

below zero) by the sum of (a) unrecaptured section 1250
gain, and (b) 28% rate gain, plus qualified dividend
income. See section 1(h)(3).
If the partnership has net ordinary loss, net short-term
capital loss, or net 28% rate loss, each net loss should be
netted against the appropriate categories of income and
gain to determine the amounts of income and gain to be
entered on lines 1a, 1e, 1i, 1m, and 1q, respectively. Don’t
enter a negative number on line 1a, 1e, 1i, 1m, or 1q. See
section 1(h) and Notice 97-59, 1997-45 I.R.B. 7, available
at IRS.gov/pub/irs-irbs/irb97-45.pdf, for rules for netting
gains and losses.
Lines 1b, 1f, 1j, 1n, and 1r. Enter the reduction amounts
for state and local taxes under Regulations section
1.1446-6(c)(1)(iii). See Reductions for State and Local
Taxes in the Instructions for Forms 8804, 8805, and 8813
for additional information. The netting rules under section
1(h) and Notice 97-59 must be considered in determining
the category of income the reduction amounts offset.

when determining any penalty due on Schedule A (Form
8804).
If the partnership begins using the prior-year safe
harbor method and it determines later in the tax year
(based upon the standard option annualization method,
described later in these instructions) that it won’t meet the
50% of ECTI requirement described in the last bulleted
item above, it can make all subsequent installment
payments using the standard option annualization method
and it won’t be subject to the penalty determined on
Schedule A (Form 8804). This change in method must be
disclosed in a statement attached to the Form 8804 filed
by the partnership for the current tax year. The statement
must include enough information to allow the IRS to
determine whether the change was appropriate.

Lines 1c, 1g, 1k, 1o, and 1s. Enter the reduction
amounts resulting from certified partner-level items
received from foreign partners using Form 8804-C,
Certificate of Partner-Level Items to Reduce Section 1446
Withholding. See Certification of Deductions and Losses
in the Instructions for Forms 8804, 8805, and 8813 for
additional information. The netting rules under section
1(h) and Notice 97-59 must be considered in determining
the category of income the reduction amounts offset.

If the partnership begins using the prior-year safe
harbor method and switches to the current-year safe
harbor (because the partnership doesn’t qualify for the
relief described in the previous paragraph (that is, using
the standard option annualization method) or the
partnership chooses not to continue using it), in order to
avoid an underpayment penalty on the current installment
payment, the partnership must pay the sum of (a) the
current installment payment based on the current year
safe harbor, plus (b) the sum of the amount by which the
current-year safe harbor exceeds the prior-year safe
harbor amount paid in for each prior installment period
during which it qualified for the prior-year safe harbor.

Line 8—Prior-Year Safe Harbor

Line 9

Enter the total section 1446 tax that would have been due
for 2025, applying the 2025 rates (see the 2025 Form
8804-W for the 2025 rates), on ECTI allocable to all
foreign partners for 2025, without any reductions for state
and local taxes under Regulations section 1.1446-6(c)(1)
(iii) or certified partner-level items. For the partnership’s
first installment payment, if the 2025 Form 8804 hasn’t yet
been filed, an estimate is acceptable. However, if the
partnership later determines that this estimate is incorrect,
see Refiguring Estimated Section 1446 Tax, earlier.
Complete line 8 only if all of the following apply.

• The prior tax year consisted of 12 months.
• The partnership timely files (including extensions) a

U.S. return of partnership income (for example, Form
1065) for the prior year.
• The amount of ECTI for the prior tax year is not less
than 50% of the ECTI expected for the current tax year.
Furthermore, the Form 8804 on which the current-year
ECTI will be reported must be timely filed.
If any of the above doesn’t apply, skip line 8 and enter
the amount from line 7 on line 9.
If the partnership qualifies to use the prior-year safe
harbor and chooses that method, it must use that method
to pay each of its installments during the tax year.
Furthermore, for each installment payment, the average of
that installment and prior installments during the tax year
must be at least 25% of the amount that satisfies the
partnership’s section 1446 tax liability under the prior-year
safe harbor. If the partnership doesn’t satisfy both of these
requirements, it won’t qualify for the prior-year safe harbor
2

Enter the smaller of line 7 or line 8. However, if, for any
installment payment, line 7 is smaller than line 8 and you
enter that smaller line 7 amount on line 9, you won’t qualify
for the prior-year safe harbor when determining any
penalty due on Schedule A (Form 8804) (see the line 8
instructions, earlier). Therefore, in that case, for any
subsequent installment payment during the tax year, don’t
use the line 8 amount.

Line 10—Installment Due Dates
Calendar-year taxpayers. Enter the 15th day of the 4th,
6th, 9th, and 12th months for the partnership’s calendar
year in columns (a) through (d). If the regular due date
falls on a Saturday, Sunday, or legal holiday, enter the next
business day.
Fiscal-year taxpayers. Enter the 15th day of the 4th, 6th,
9th, and 12th months of the partnership’s tax year in
columns (a) through (d). If the regular due date falls on a
Saturday, Sunday, or legal holiday, enter the next business
day.

Line 11

Enter 25% (0.25) of line 9 in columns (a) through (d). If the
partnership uses the annualized income installment
method or the adjusted seasonal installment method, then
enter the amount from line 43.
Annualized income installment method and/or adjusted seasonal installment method. If the partnership’s
ECTI is expected to vary during the year because, for
example, it operates its business on a seasonal basis, it
may be able to lower the amount of one or more required
Instructions for Form 8804-W (2026)

installments by using the annualized income installment
method and/or the adjusted seasonal installment method.
For example, a ski shop, which receives most of its
income during the winter months, may be able to benefit
from using one or both of these methods in figuring one or
more of its required installments.
To use one or both of these methods, complete Part II
and/or Part III of the form. If those Parts are used for any
payment date, those Parts must be used for all
subsequent payment due dates. To arrive at the amount of
each required installment, Part IV automatically selects
the smallest of (a) the annualized income installment (if
applicable), (b) the adjusted seasonal installment (if
applicable), or (c) the current-year safe harbor (increased
by any recapture of a reduction in a required installment
under section 6655(e)(1)(B)).

Line 12

Include on line 12 any 2025 overpayment that the
partnership chose to credit against its 2026 tax. The
overpayment is credited against unpaid required
installments in the order in which the installments are
required to be paid.
Also, include on line 12 the following.

• Section 1446 tax withheld and paid by another

partnership because the partnership preparing this Form
8804-W was a partner in that partnership during the tax
year. See the instructions for Form 8804, line 6b and
line 6c, in the Instructions for Forms 8804, 8805, and
8813.
• Section 1445(a) or 1445(e)(1) tax withheld from or paid
by the partnership filing Form 8804-W during the tax year
for a disposition of a U.S. real property interest. See the
instructions for Form 8804, line 6d and line 6e, in the
Instructions for Forms 8804, 8805, and 8813.
• Section 1446(f)(1) tax withheld from the partnership
filing Form 8804-W during the tax year for a disposition of
an interest in a partnership engaged in the conduct of a
U.S. trade or business. See the instructions for Form
8804, lines 6f and 6g, in the Instructions for Forms 8804,
8805, and 8813.
The partnership generally enters these amounts in the
column that corresponds to the installment period for
which these amounts were paid or withheld. However, if
the partnership learns about the payments or withholding
in a subsequent installment period, the partnership can
claim them in that period.

Parts II Through IV

If only the adjusted seasonal installment method (Part II) is
used, complete Parts II and IV. If only the annualized
income installment method (Part III) is used, complete
Parts III and IV. If both methods are used, complete all
three Parts. Enter in each column on line 11 the amounts
from the corresponding column of line 43.
Caution: Don’t figure any required installment until after
the end of the month preceding the due date for that
installment.
Extraordinary items. Generally, under the annualized
income installment method, extraordinary items must be
taken into account after annualizing the ECTI for the
Instructions for Form 8804-W (2026)

annualization period. Similar rules apply in determining
ECTI under the adjusted seasonal installment method. An
extraordinary item includes:
• Any item identified in Regulations section 1.1502-76(b)
(2)(ii)(C)(1), (2), (3), (4), (7), and (8);
• A section 481(a) adjustment; and
• Net gain or loss from the disposition of 25% or more of
the fair market value of the partnership’s business assets
during the tax year.
These extraordinary items must be accounted for in the
appropriate annualization period. However, a section
481(a) adjustment (unless the partnership makes the
alternative choice under Regulations section 1.6655-2(f)
(3)(ii)(C)) is treated as an extraordinary item occurring on
the first day of the tax year in which the item is taken into
account in determining ECTI.
For more information regarding extraordinary items,
see Regulations section 1.6655-2(f)(3)(ii) and the
examples in Regulations section 1.6655-2(f)(3)(vii). Also,
see Regulations section 1.6655-3(d)(3).
De minimis rule. Extraordinary items identified above
resulting from a particular transaction that total less than
$1 million (other than a section 481(a) adjustment) can be
annualized using the general rules of Regulations section
1.6655-2(f) or, if the partnership chooses, can be taken
into account after annualizing the ECTI for the
annualization period.

Part II—Adjusted Seasonal
Installment Method
Note: Part II doesn’t reflect the lower preferential rates
permitted under Regulations section 1.1446-3(a)(2).
These were omitted because, for most taxpayers, the
income reported in Part II will be predominantly (or
exclusively) ordinary income. If the partnership wishes to
consider lower preferential rates for Part II (and if the
requirements outlined in the Note in the line 31
instructions are met), it should prepare a statement that
appropriately expands lines 15 and 22 through 25 to show
the applicable special types of income or gain and the
applicable percentages (see, for example, lines 33 and 34
of this Form 8804-W). Also, Part II, lines 15 and 22
through 25, don’t provide the separate entries for
corporate and non-corporate partners necessary to apply
the rates on lines 25a and 25b. A partnership with
corporate and non-corporate partners completing Part II
should prepare a statement that appropriately expands
lines 15 and 22 through 25 to show the amounts allocable
to both types of partners.
Complete this part only if the partnership’s base period
percentage for any 6 consecutive months of the tax year
equals or exceeds 70%. Figure the base period
percentage using the 6-month period in which the
partnership normally receives the largest part of its ECTI.
The base period percentage for any period of 6
consecutive months is the average of the three
percentages figured by dividing the ECTI for the
corresponding 6-consecutive-month period in each of the
3 preceding tax years by the ECTI for each of their
respective tax years.
3

Example. An amusement park with a calendar year as
its tax year receives the largest part of its ECTI during a
6-month period, May through October. To figure its base
period percentage for this 6-month period, the amusement
park figures its ECTI for each May–October period in
2023, 2024, and 2025. It then divides the ECTI for each
May–October period by the total ECTI for that particular
tax year. The resulting percentages are 69% (0.69) for
May–October 2023, 74% (0.74) for May–October 2024,
and 67% (0.67) for May–October 2025. Because the
average of 69% (0.69), 74% (0.74), and 67% (0.67) is
70% (0.70), the base period percentage for May–October
2026 is 70% (0.70). Therefore, the amusement park
qualifies for the adjusted seasonal installment method.

Line 15

If the partnership has certain extraordinary items, special
rules apply. Don’t include on line 15 the de minimis
extraordinary items that the partnership chooses to
include on line 22b. See Extraordinary items, earlier.

Line 22b

If the partnership has certain extraordinary items of $1
million or more from a transaction, or a section 481(a)
adjustment, special rules apply. Include these amounts on
line 22b for the appropriate period. Also, include on
line 22b the de minimis extraordinary items that the
partnership chooses to exclude from line 15. See
Extraordinary items, earlier.

Line 23

Enter the reduction to the line 22c amount for state and
local taxes under Regulations section 1.1446-6(c)(1)(iii)
and for certified foreign partner-level items submitted
under Regulations section 1.1446-6. See Certification of
Deductions and Losses in the Instructions for Forms 8804,
8805, and 8813 for additional information.

Part III—Annualized Income
Installment Method
Line 30—Annualization Periods

Enter in the space on line 30, columns (a) through (d),
respectively, the annualization periods that the partnership
is using, based on the options listed below. For example, if
the partnership elects Option 1, enter on line 30 the
annualization periods 2, 4, 7, and 10, in columns (a)
through (d), respectively.
Caution: Use Option 1 or Option 2 only if the partnership
elected to use one of these options by filing Form 8842,
Election To Use Different Annualization Periods for
Corporate Estimated Tax, on or before the due date of the
first required installment payment. Once made, the
election is irrevocable for the particular tax year.
1st Installment

2nd Installment

3rd Installment

Standard
Option

3

3

6

9

Option 1

2

4

7

10

Option 2

3

5

8

11

4

Line 31—ECTI Allocable to All Foreign Partners

Enter on lines 31a through 31e the ECTI allocable to all
foreign partners for the months entered for each
annualization period in columns (a) through (d) on line 30.
To determine the allocable share of ECTI for all foreign
partners, see Effectively Connected Taxable Income in the
Instructions for Forms 8804, 8805, and 8813.
If the partnership has certain extraordinary items,
special rules apply. Don’t include on line 31a, 31b, 31c,
31d, or 31e the de minimis extraordinary items that the
partnership chooses to include on line 33a, 33e, 33i, 33m,
or 33q, respectively. See Extraordinary items, earlier.

Note: Enter on lines 31c through 31e the specified types
of ECTI (a) allocable to those partners who would be
entitled to use a preferential rate on such income or gain
(see Regulations section 1.1446-3(a)(2)), and (b) for
whom the partnership has sufficient documentation to
meet the requirements of Regulations section 1.1446-3(a)
(2)(ii).
A partner may be entitled to use a preferential rate on
the following types of income or gain.
1. Line 31c—See section 1(h)(4) and the instructions
for Schedule D (Form 1040), line 18, for more information
regarding 28% rate gain.
2. Line 31d—See section 1(h)(6) and the instructions
for Schedule D (Form 1040), line 19, for more information
regarding unrecaptured section 1250 gain.
3. Line 31e—Adjusted net capital gain is net capital
gain, as defined in section 1222(11), reduced (but not
below zero) by the sum of (a) unrecaptured section 1250
gain, and (b) 28% rate gain, plus qualified dividend
income. See section 1(h)(3).
If the partnership has net ordinary loss, net short-term
capital loss, or net 28% rate loss, each net loss should be
netted against the appropriate categories of income and
gain to determine the amounts of income and gain to be
entered on lines 31a through 31e, respectively. Don’t enter
a negative number on lines 31a through 31e. See section
1(h) and Notice 97-59 for rules for netting gains and
losses.

Line 32—Annualization Amounts

Enter the annualization amounts for the option used on
line 30. For example, if the partnership elects Option 1,
enter on line 32 the annualization amounts 6, 3, 1.71429,
and 1.2 in columns (a) through (d), respectively.
1st Installment

2nd Installment

3rd Installment

4th Installment

Standard
Option

4

4

2

1.33333

Option 1

6

3

1.71429

1.2

Option 2

4

2.4

1.5

1.09091

4th Installment

Lines 33a, 33e, 33i, 33m, and 33q

If the partnership has certain extraordinary items that total
$1 million or more from a particular transaction, or a
section 481(a) adjustment, special rules apply. Include
these amounts on line 33a, 33e, 33i, 33m, or 33q,
Instructions for Form 8804-W (2026)

depending upon the type of income against which the item
applies, for the appropriate period. Also, include on
line 33a, 33e, 33i, 33m, or 33q the de minimis
extraordinary items that the partnership chooses to
exclude from line 31a, 31b, 31c, 31d, or 31e, respectively.
See Extraordinary items, earlier.
Enter on lines 33i, 33m, and 33q the specified types of
ECTI if the partner would be entitled to use a preferential
rate on the income or gain (see Regulations section
1.1446-3(a)(2)).
1. Line 33i—See section 1(h)(4) and the instructions
for Schedule D (Form 1040), line 18, for more information
regarding 28% rate gain.
2. Line 33m—See section 1(h)(6) and the instructions
for Schedule D (Form 1040), line 19, for more information
regarding unrecaptured section 1250 gain.
3. Line 33q—Adjusted net capital gain is net capital
gain, as defined in section 1222(11), reduced (but not
below zero) by the sum of (a) unrecaptured section 1250
gain, and (b) 28% rate gain, plus qualified dividend
income. See section 1(h)(3).

Lines 33b, 33f, 33j, 33n, and 33r

Enter the reduction amounts for state and local taxes
under Regulations section 1.1446-6(c)(1)(iii). See
Reductions for State and Local Taxes in the Instructions

for Forms 8804, 8805, and 8813 for additional information.
The netting rules under section 1(h) and Notice 97-59
must be considered in determining the category of income
the reduction amounts offset.

Lines 33c, 33g, 33k, 33o, and 33s

Enter the reduction amounts resulting from certified
partner-level items received from foreign partners using
Form 8804-C. See Certification of Deductions and Losses
in the Instructions for Forms 8804, 8805, and 8813 for
additional information. The netting rules under section
1(h) and Notice 97-59 must be considered in determining
the category of income the reduction amounts offset.

Part IV—Required Installments Under
Part II and/or Part III
Line 38

Before completing line 38 in columns (b) through (d),
complete lines 39 through 43 in each of the preceding
columns. For example, complete lines 39 through 43 in
column (a) before completing line 38 in column (b).

Line 43—Required Installments

For each installment, enter the smaller of line 39 or line 42
on line 43. Also, enter the result on line 11.

Paperwork Reduction Act Notice. Your use of this form is optional. It is provided to aid the partnership in determining
its tax liability.
You aren’t required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for business taxpayers filing this form is approved under OMB control number 1545-0123.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,
we’d be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or, you can write to the
Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.
Don’t send the tax form to this office. Instead, keep the form for your records.

Instructions for Form 8804-W (2026)

5