Covid loan 3 yr split has caused us to receive tax prepayment coupons. It is finished now, taxes should be even if not a refund next yr. Do we still have to prepay?

Forum|Forum|3 years ago
April 18, 2023
1 reply
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We had taxes taken out for the entire withdrawal (to clarify, not a loan, it was a withdrawal, didn't repay) the first year, but of course, they were basically refunded that year. We had to pay the last 2 years, due to the thirds putting us in a higher bracket, but the 3 year split is now complete. We have always received refunds up until the Covid withdrawal and should be getting refunds moving forward. I don't feel we should have to pay this, when it should be known that this is the last year for the 3 year reporting split for all filers. Has anyone looked into this?

TurboTax Deluxe Online

Best answer by AmyC

No, estimated payments are only for when you are not able to withhold the correct amount. The program is just suggesting it based on last year's income.

With the changes in the tax laws, it might not hurt to determine how much your tax liability will be for the federal with TaxCaster tax calculator. You could change your w4 for work/ pension, if there might be a shortfall.

AmyCAnswer

Level 15

No, estimated payments are only for when you are not able to withhold the correct amount. The program is just suggesting it based on last year's income.

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Pattyr1Author

Level 2

Thank you so much for the clarification, I really appreciate it. We have our allowances set fairly high, so we should be good, but I will check out the calculator for reassurance since it did change this year. Thank you again, I’ll sleep better tonight not worrying about it!