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mitch112577
New Member

Should I have a 2020 tax liability even if I received a refund in 2021?

The system is telling my I have a $9 underpayment penalty for a $1711 tax liability from 2020, even though I received a refund of $388 for my 2020 taxes.
2 Replies
ThomasM125
Employee Tax Expert

Should I have a 2020 tax liability even if I received a refund in 2021?

You can have a underpayment of tax penalty even if you received a refund. The underpayment penalty can apply when you don't pay your tax on a timely basis during the year. For example, if you paid all of your income tax via an estimated tax payment in January after the end of the tax year, but you paid more that what your tax was, then you would get a penalty for underpayment of tax even though you would have a refund, since you were supposed to pay the tax in quarterly during the year.

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fanfare
Level 15

Should I have a 2020 tax liability even if I received a refund in 2021?

your $9 is not a tax liability, it is interest.

It will be take out of your refund.

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