Table of Contents
Future Developments
| General Instructions |
| Specific Instructions |
Section references are to the Internal Revenue Code unless otherwise noted.
For the latest information about developments related to Form 720, and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form720.
Sections 4375 and 4376 patient-centered outcomes reseaearch fee increase. The fee for policy and plan years ending on or after October 1, 2023, but before October 1, 2024, is increased to the applicable rate of $3.22 multiplied by the average number of lives covered under the policy or plan. The fee for policy and plan years ending on or after October 1, 2022, but before October 1, 2023, remains at the applicable rate of $3.00, multiplied by the average number of lives covered under the policy or plan. See patient-centered outcomes research (PCOR) fee (IRS No. 133), later, and Notice 2023-70.
Electronic filing. Top You can electronically file Form 720 through any electronic return originator (ERO), transmitter, and/or intermediate service provider (ISP) participating in the IRS e-file program for excise taxes. For more information on e-file, go to Excise Tax e-File & Compliance (ETEC) Programs - Form 720, 2290 and 8849.
Federal tax deposits made by electronic funds transfer. Top Generally, you must use electronic funds transfer to make federal tax deposits, such as deposits of employment tax, excise tax (for exceptions, see Payment of Taxes, later), and corporate income tax. Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you don't want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. EFTPS is a free service provided by the Department of the Treasury.
To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov or call 800-555-4477. See Pub. 966.
Use Form 720 and attachments to report your liability by IRS No. and pay the excise taxes listed on the form. If you report a liability on Part I or Part II, you may be eligible to use Schedule C to claim a credit.
Caution! See Patient-centered outcomes research (PCOR) fee (IRS No. 133) in Part II for special rules about who must file to report the PCOR fee.
You must file Form 720 if:
See How To File, later, for more information.
You must file a return for each quarter of the calendar year as follows.
| Quarter covered | Due by |
| Jan., Feb., Mar. | April 30 |
| Apr., May, June | July 31 |
| July, Aug., Sept. | October 31 |
| Oct., Nov., Dec. | January 31 |
If any due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file the return on the next business day.
Send your return to the IRS using the U.S. Postal Service or a designated private delivery service to meet the "timely mailing as timely filing/paying" rule. See Private Delivery Services, later.
Send Form 720 to:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009
If you aren't reporting a tax that you normally report, enter a zero on the appropriate line on Form 720, Part I or II. Also, if you have no tax to report, enter "None" on Form 720, Part III, line 3; sign and date the return. If you file the second quarter Form 720 only to report the PCOR fee, no filing is required in other quarters unless you have to report other fees or taxes.
If you have adjustments to liabilities reported for prior quarters, see Form 720-X, Amended Quarterly Federal Excise Tax Return. Don't enter adjustments on Form 720.
If you attach additional sheets, enter your name and EIN on each sheet.
File a final return if you have been filing Form 720 and you:
TIP. If you are only filing to report zero tax and you won't owe excise tax in future quarters, check the Final return box above Part I of Form 720.
Keep copies of your tax return, records, and accounts of all transactions to show that the correct tax has been paid. Keep records to support all claims and all exemptions at least 4 years from the latest of the date:
If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. Don't include an explanation when you file your return.
Trust fund recovery penalty. Top If communications, air transportation, and indoor tanning services taxes are collected but not paid to the U.S. Treasury or are willfully not collected, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid tax.
The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so.
A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an employee of a sole proprietorship, an accountant, or a volunteer director/trustee. A responsible person may also include one who signs checks for the business or otherwise has authority to cause the spending of business funds.
Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if they know the required actions aren't taking place.
You may find the following products helpful when preparing Form 720 and any attachments.
You can use PDSs designated by the IRS to meet the "timely mailing as timely filing/paying" rule for tax returns and payments. Go to IRS.gov/PDS for the current list of designated services. The PDS can tell you how to get written proof of the mail date. For the IRS mailing address to use if you are using a PDS, go to IRS.gov/PDSStreetAddresses.
Caution! PDSs can’t deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.
The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
Enter your name, address, and the quarter ending date (month and year). If your address changes, check the address change box above Form 720, Part I.
P.O. box. Top If the post office doesn't deliver mail to the street address and you have a P.O. box, show the box number instead of the street address.
Foreign address. Top Follow the country's practice for entering the postal code. Don't abbreviate the country name.
Enter the correct EIN. If you are a one-time filer, you may not need an EIN. See Gas guzzler tax (IRS No. 40), later. If you don't have an EIN, you may apply for one online by going to IRS.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.
Disregarded entities and qualified subchapter S subsidiaries. Top Qualified subchapter S subsidiaries (QSubs) and eligible single-owner disregarded entities are treated as separate entities for excise tax and reporting purposes. QSubs and eligible single-owner disregarded entities must pay and report excise taxes (other than IRS Nos. 31, 51, and 117), register for most excise tax activities, and claim any refunds, credits, and payments under their EINs. These actions can't take place under the owner's taxpayer identification number (TIN). Some QSubs and disregarded entities may already have an EIN. However, if you are unsure, please call the IRS Business and Specialty Tax Line at 800-829-4933.
Generally, QSubs and eligible single-owner disregarded entities will continue to be treated as disregarded entities for other federal tax purposes (other than employment taxes). Thus, taxpayers filing Form 4136, with Form 1040, U.S. Individual Income Tax Return, or 1040-SR, U.S. Tax Return for Seniors, can use the owner's TIN. For more information, see Regulations section 301.7701-2(c)(2).
Form 720 must be signed by a person authorized by the entity to sign this return.
If you want to allow an employee of your business, a return preparer, or other third party to discuss your Form 720 with the IRS, check the "Yes" box on Form 720 under Third Party Designee. Also, enter the designee's name, phone number, and any five digits that person chooses as their personal identification number (PIN).
By checking the "Yes" box, you are authorizing the IRS to speak with the designee to answer any questions relating to the processing of, or the information reported on, Form 720. You are also authorizing the designee to:
You aren't authorizing the designee to receive any refund check, bind you to anything (including additional tax liability), or otherwise represent you before the IRS. If you want to expand the designee's authority, see Pub. 947, Practice Before the IRS and Power of Attorney.
The authorization will automatically expire 1 year from the due date (without regard to extensions) for filing your Form 720. If you or your designee wants to revoke this authorization, send a written statement of revocation to:
Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999
See Pub. 947 for more information.
A paid preparer must sign Form 720 and provide the information in the Paid Preparer Use Only section at the end of the form if the preparer was paid to prepare the form and isn't an employee of the filing entity. The preparer must give you a copy of the form in addition to the copy to be filed with the IRS. If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, you must also enter the firm's name and the EIN of the firm. However, you can't use the EIN of the tax preparation firm in place of your PTIN. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, go to IRS.gov/PTIN.
ftw: How to Add a Paid Preparer
Patient-centered outcomes research (PCOR) fee (IRS No. 133). Top The PCOR fee is imposed on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4376) for policy and plan years ending on or after October 1, 2012. Generally, references to taxes on Form 720 include this fee.
Specified health insurance policies. Top For issuers of
specified health insurance policies, the fee for a policy year ending on or after October 1, 2023, but before October 1, 2024, is $3.22 (line 133(b)) ($3.00 for a policy year ending on or after October 1, 2023,
but before October 1, 2024 (line 133(a)), multiplied by the average number of lives covered under the policy for that policy year. Generally, issuers of specified health insurance policies must use one of the
following four alternative methods to determine the average number of lives covered under a policy for the policy year.
ftw: The instructions are not clear on how to submit prior year PCOR fees, but ftw has come up with a way so that users are provided an option to select other date ranges within the 720
Checklist to calculate prior fees only. See the instructions for Penalties and Interest for more information.
The Final 720 will not update the fee within column (b) as it is a hard-coded fee placed by the IRS and users will receive an edit check warning when a date range is selected that does not match the current Final 720.
The fees will work as follows:
Applicable self-insured health plans. Top
For plan sponsors of applicable self-insured health plans, the fee for a plan year ending on or after October 1, 2023, but before October 1, 2024, is $3.22 (line 133(d))
($3.00 for a policy year ending on or after October 1, 2022, but before October 1, 2023 (line 133(c)), multiplied by the average number of lives covered under the plan for that plan year.
Generally, plan sponsors of applicable self-insured health plans must use one of the following three alternative methods to determine the average number of lives covered under a plan for the plan year.
ftw: The instructions are not clear on how to submit prior year PCOR fees, but ftw has come up with a way so that users are provided an option to select other date ranges within the 720 Checklist
to calculate prior fees only. See the instructions for Penalties and Interest for more information. The Final
720 will not update the fee within column (b) as it is a hard-coded fee placed by the IRS and users will receive an edit check warning when a date range is selected that does not match the current Final 720. The fees
will work as follows:
Reporting and paying the fee. Top File Form 720 annually to report and pay the fee on the second quarter Form 720 no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. Because the rate used to determine the fee varies from year to year, you should determine the fee using the instructions for the second quarter Form 720. If you file Form 720 only to report the fee, don't file Form 720 for the first, third, or fourth quarter of the year. If you file Form 720 to report quarterly excise tax liability for the first, third, or fourth quarter of the year (for example, filers reporting the foreign insurance tax (IRS No. 30), don't make an entry on the line for IRS No. 133 on those filings).
Deposits aren't required for this fee, so issuers and plan sponsors aren't required to pay the fee using EFTPS. However, if the fee is paid using EFTPS, the payment should be applied to the second quarter. See Electronic deposit requirement under Payment of Taxes, later.
Report the average number of lives covered in column (a). Apply the applicable rate ((b) Rate for avg. covered life) and enter the fee in column (c).
Combine the fees for specified health insurance policies and applicable self-insured health plans and enter the total in the tax column on the line for IRS No. 133.
More information. Top For more information, including methods for calculating the average number of lives covered, see sections 4375, 4376, and 4377.
Line 4. Top Report on Form 720, line 4, the total claims from Schedule C, line 15. See Schedule C. Claims, later.
Line 6. Top Include on line 6 the amount from line 11 of your previous return that you applied to this return and the amount from Form 720-X, line 5b.
Note. Include on line 6 of your next return the amount from line 11 you want to have applied to that return.
Caution! If you owe other federal tax, interest, or penalty, the overpayment on line 11 and line 7 will first be applied to the unpaid amounts.
Line 10. Top If line 3 is more than line 9, enter the difference on line 10. You don't have to pay if line 10 is under $1.00.
You may pay the amount shown on line 10 by EFTPS, check or money order, or, if filing electronically, electronic funds withdrawal (direct debit). If you pay by EFTPS or direct debit, don't file Form 720-V.
Caution! If you don't deposit as required and, instead, pay the taxes with Form 720, you may be subject to a penalty.
Generally, semimonthly deposits of excise taxes are required. A semimonthly period is the first 15 days of a month (the first semimonthly period) or the 16th through the last day of a month (the second semimonthly period).
However, no deposit is required for the situations listed below. The taxes are payable with the return.
Special rule for deposits of taxes in September 2024. If you are required to make deposits, see the chart below. The special rule doesn't apply to taxes not required to be deposited (see Payment of Taxes, earlier). See Regulations sections 40.6302(c)-2 and 40.6302(c)-3 for rules to figure the net tax liability for the deposits due in September.
| Additional deposit of taxes in September 2024 |
|||
| For the Period |
|||
| Type of Tax | Beginning on | Ending on | Due Date |
| Regular method taxes | Sept. 16 | Sept. 26 | Sept. 29 |
| Alternative method taxes (IRS Nos. 22, 26, 27, and 28) (based on amounts billed) | Sept. 1 | Sept. 11 | Sept. 29 |
Caution! Using the regular method: For the remaining days in September (27–30), make your deposits by the 14th day of October. Using the alternate method: For the remaining days in September (12-30), please see Pub. 509 for deposit dates.
To avoid a penalty, make your deposits timely and don't mail your deposits directly to the IRS. Records of your deposits will be sent to the IRS for crediting to your accounts.
Electronic deposit requirement. Top You must deposit all depository taxes (such as excise tax, employment tax, or corporate income tax) by electronic funds transfer.
Depositing on time. Top For EFTPS deposits to be on time, you must initiate the transaction at least 1 day before the date the deposit is due (before 8:00 p.m. Eastern time).
If a deposit is due on a day that isn't a business day or legal holiday, see When To Make Deposits, later. The term "legal holiday" means any legal holiday in the District of Columbia.
Same-day wire payment option. Top If you fail to submit a deposit transaction on EFTPS by 8:00 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Collection Service (FTCS). To use the same-day wire payment method, you will need to make arrangements with your financial institution ahead of time. Please check with your financial institution regarding availability, deadlines, and costs. Your financial institution may charge you a fee for payments made this way. To learn more about the information you will need to provide your financial institution to make a same-day wire payment, go to IRS.gov/SameDayWire.
TIP. You will automatically be enrolled in EFTPS when you apply for an EIN. You will receive a separate mailing containing instructions for activating your EFTPS enrollment after you receive your EIN.
There are two methods for determining deposits: the regular method and the alternative method.
The regular method applies to all taxes on Form 720, Part I, except for communications and air transportation taxes if deposits are based on amounts billed or tickets sold, rather than on amounts actually collected. See Alternative method (IRS Nos. 22, 26, 27 and 28), below.
If you are depositing more than one tax under a method, combine all the taxes under the method and make one deposit for the semimonthly period.
Regular method. Top The deposit of tax for a semimonthly period is due by the 14th day following that period. Generally, this is the 29th day of a month for the first semimonthly period and the 14th day of the following month for the second semimonthly period. If the 14th or the 29th day falls on a Saturday, Sunday, or legal holiday, you must make the deposit by the immediately preceding day that isn't a Saturday, Sunday, or legal holiday.
Alternative method (IRS Nos. 22, 26, 27, and 28). Top Deposits of communications and air transportation taxes may be based on taxes included in amounts billed or tickets sold during a semimonthly period instead of on taxes actually collected during the period. Under the alternative method, the tax included in amounts billed or tickets sold during a semimonthly period is considered collected during the first 7 days of the second following semimonthly period. The deposit of tax is due by the third business day after the seventh day of that period.
Example. The tax included in amounts billed or tickets sold for the period June 16-30, 2024, is considered collected from July 16-22, 2024, and must be deposited by July 25, 2024.
To use the alternative method, you must keep separate accounts of the tax included in amounts billed or tickets sold during the month and report on Form 720 the tax included in amounts billed or tickets sold and not the amount of tax that is actually collected. For example, amounts billed in December, January, and February are considered collected during January, February, and March and are reported on Form 720 as the tax for the first quarter of the calendar year.
The separate account for each month must reflect:
The separate account for any month can't include an adjustment resulting from a refusal to pay or inability to collect unless the refusal has been reported to the IRS. See Communications and Air Transportation Taxes Uncollected Tax Report, earlier.
The net tax liability that is considered collected during the semimonthly period must be either:
Deposits of taxes for a semimonthly period must be at least 95% of the amount of net tax liability for that period, unless the safe harbor rule applies. See Safe Harbor Rule, later.
The net tax liability for a semimonthly period is the total liability for the period minus any claims allowed on Schedule C for the period. Net tax liability for a semimonthly period may be figured by dividing the net tax liability for the month by 2, provided this method of computation is used for all semimonthly periods in the calendar quarter.
Caution! The net tax liability for a semimonthly period isn't reduced by any amounts from Form 720-X.
The safe harbor rule applies separately to deposits under the regular method and the alternative method. Persons who filed Form 720 for the lookback quarter (the second calendar quarter preceding the current quarter) are considered to meet the semimonthly deposit requirement if the deposit for each semimonthly period in the current quarter is at least 1⁄6 (16.67%) of the net tax liability reported for the lookback quarter.
For the semimonthly period for which the additional deposit is required (September 1-11 and 16-26), the additional deposit must be at least 11⁄90 (12.23%)), of the net tax liability reported for the lookback quarter. Also, the total deposit for that semimonthly period must be at least 1⁄6 (16.67%) of the net tax liability reported for the lookback quarter.
Exceptions. The safe harbor rule doesn't apply to the following quarters.
Requirements to be met. For the safe harbor rule to apply, you must pay any underpayment for the current quarter by the due date of the return and check the box on line 5 of Form 720.
Caution! The IRS may withdraw the right to make deposits of tax using the safe harbor rule from any person not complying with these rules.
If you can't pay the full amount of tax owed, you can apply for an installment agreement online. You can apply for an installment agreement online if the total amount you owe in combined tax, penalties, and interest is $25,000 ($50,000 for individuals) or less, and you've filed all required returns. To apply using the Online Payment Agreement Application, go to IRS.gov/OPA.
Privacy Act and Paperwork Reduction Act Notice. Top We ask for the information on these forms in order to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Miscellaneous excise taxes are imposed under Subtitle D of the Internal Revenue Code. These forms are used to determine the amount of tax that you owe. Section 6011 requires you to provide the requested information. Section 6109 requires you to provide your identifying number. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and territories for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. Failure to provide this information in a timely manner or providing false or fraudulent information may subject you to penalties.
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 these forms and related schedules will vary depending on individual circumstances. The estimated average times are:
| Form | Recordkeeping | Learning about the law or the form |
Preparing, copying, assembling and sending the form to the IRS |
| 720 | 8 hr., 59 min. | 1 hr., 5 min. | 2 hr., 3 min. |
| 720-X | 6 hr., 13 min. | 0 hr., 18 min. | 0 hr., 24 min. |
Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions. You can send us comments through IRS.gov/FormComments. Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW
IR-6526
Washington, DC 20224
Although we can't respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Do not send tax questions, tax returns, or payments to the above address.
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