PA Underpayment of Estimated Tax

[ksr1025]

I need to annualize (i.e., enter my income by quarters) my PA income because I receive 85% of it in the final quarter.  However, I can't access the Exception 2 area of the PA REV-1630 worksheet.  TurboTax asks me if I want PA to calculate the penalty. If I say "yes," the program exits the "underpayment" section.  If I say "no," TurboTax calculates the penalty based on Exception 1, i.e., the assumption that the tax should have been paid in equal installments based on 2023's tax, which was less than 2024's.  I've done the arduous work of calculating my income by quarter.  Now, how do I get it into the TurboTax program?

[ksr1025]

Please allow me to clarify my question, as I used the term "annualize" that tax expert DianeW777 points out in her response to a similar question in January 2024, that PA uses only to describe the situation when a taxpayer dies during the tax year.   I am very much alive.  What I want to do is use "Exception 2" to REV-1630, the PA Underpayment of Estimated Tax worksheet.  "Exception 2" can be used, "if your income was earned unevenly throughout 2024 and your 2024 estimated tax payments, tax withholding and credits equal at least 90 percent of the tax on your taxable income for the periods."  My problem is that I can't get to any point in the interview that allows me to enter those numbers.  Perhaps I could type directly onto the form, but I've never done that in Turbo Tax and need some guidance on how to do it.

[AmyC]

I think you are getting into the program far enough. I have worked on this for quite a while to get a good tax liability, estimated payments, etc. I entered last year's information with big numbers to make sure I would have a penalty. I got the place to enter income unevenly earned.

From Let's Review Your Underpayment Penalty

1. Select yes to see if you qualify for exceptions
2. Enter last year's tax liability
3. I also checked the box that I started making estimated payments when I realized I needed to
4. Continue
5. I randomly selected yes to estimated payments in 2023 and no to PA 40 ESR (both yes did not get me to our goal)
6. Continue
7. Screen showing I do not qualify for penalty exclusion
8. Continue
9. Screen Estimated Taxes were Required
10. Continue
11. Let's see if you earned income unevenly
12. Select yes
13. Enter your income by accumulated amount

I had my penalty reduced to $1. 

[ksr1025]

Thanks.  I also found that I could also type it directly in on Forms, REV-1630, Exception II, Line A.  Normally, I like to enter everything from the interview, but the program completed the rest of the calculations correctly when I entered the numbers.