Hello there, I'm a resident of MT and got a refund on my 2023 state income taxes. Turbotax is saying that I have an underpayment penalty for 2023. Any help on this?

[parasalmo21]

How can I be getting an underpayment penalty, when I got a refund? I check with the Montana Department of Revenue and I they have no record of me owing any money to them.

[JohnB5677]

Please clarify your question.

• Are you preparing your 2024 tax return?
• Are you in the Online version, or do you have the Desktop software?
• Are you in the State Tax section?
• Are you doing some kind of Federal or State tax payments?

Please contact us again to provide some additional details. 

[parasalmo21]

Sorry limited characters allowed in the question box. Did you view the additional details?

• Are you preparing your 2024 tax return? Yes.
• Are you in the Online version, or do you have the Desktop software? Yes, Online version.
• Are you in the State Tax section? Yes, that is why I posed the question about the underpayment penalty for 2023 that is coming up through the State Tax section of the Online version. We should not have this because we overpaid in 2023 and received a refund when taxes were filed in 2024. The Montana Department of Revenue has no record of us owing anything to the State of Montana.
• Are you doing some kind of Federal or State tax payments? Nope.

Thank you for any help you can give on this. Hopefully, this an error in the TurboTax Online software.

[MarilynG1]

What does the screen in your Montana interview say?  If it's something like 'do you want to calculate your underpayment penalty?', in your case you could just say No and Continue.

In TurboTax Online, it's always good to clear your Cache and Cookies periodically.   Sometimes data can get 'stuck' and not clear properly. 

Believe it or not, some taxpayers do incur an underpayment penalty, even when they get a Refund.

Here's more info on Underpayment Penalty with Refund.

@parasalmo21