CA underpayment of estimated tax penalty

[sfvoyage]

I just received a balance due notice with a penalty code C for “underpayment of estimated tax (estimated)” for tax year 2021 from California's Franchise Tax Board.

I do not believe that I should owe any penalty due to underpayment.  During 2021, I paid more than my necessary estimated taxes, as calculated and generated by TurboTax in order to avoid any underpayment penalty:

1. Overpaid tax from 2020 applied to my 2021 estimated tax.  (No need for Voucher #1 as a result.)
2. Voucher #2:  due on 6/15/2021.  Paid on 6/9/2021 more than the specified amount calculated by TurboTax.
3. Voucher #4: due on 1/18/2022.  Paid on 1/4/2022 more than the specified amount calculated by TurboTax.

FYI, California does not require a Voucher #3, and thus TurboTax does not generate such a voucher.  Also, TurboTax calculated my estimated 2021 quarterly California tax payments based on 90% of what I actually owed in 2020, which is what I assume to be the required amount in order to avoid any subsequent underpayment penalty.

So why is the FTB assessing me a penalty for the underpayment of estimated taxes? 

[Critter-3]

The safe harbor requires you pay 100% of the prior year taxes not 90% ... so review the calculations ... did they take into consideration withholdings from some other source like wages that did not happen as expected ? 

The following is the general rule:

You must pay estimated tax for 2021 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2021 after subtracting your withholding and tax credits.
2. You expect your withholding and tax credits to be less than the smaller of: 
   1. 90% of the tax to be shown on your 2021 tax return, or
   2. 100% of the tax shown on your 2020 tax return. Your 2020 tax return must cover all 12 months.

Note: If your AGI for 2020 was more than $150,000 ($75,000 if your filing status for 2021 is married filing a separate return), substitute 110% for 100% in (2b)

[sfvoyage]

I know that the Federal threshold is 100% or 110%, which is what TurboTax used to calculated my quarterly estimated tax payment vouchers for Federal, indeed.

However, TurboTax used 90% for California, which is why I assumed the equivalent threshold for California is 90%, even though TurboTax used 110% for federal in my case.