Underpayment penalty

[DonB10]

Last year, I received a $1918 refund from the IRS and owed NY state $0 in tax.  This year, I owe the IRS $1285 and the state of NY, $646.  I know that I don't have to pay an underpayment penalty for the 2021 tax year but how do I handle the underpayment penalty as a result of my tax liability this year?  In other words, I was told by the Turbo Tax Community that because I owe the IRS more than $1000, I have to pay an underpayment penalty for the 2021 tax year.    How do I handle this?  Do I wait until I receive a bill from the IRS?  I know that normally quarterly payments are made to the IRS.  Do I have to get involved in that for this small amount?  The bottom line question is how do I make the underpayment penalty payment?  I don't know anything about an underpayment penalty for NY state. 

[DavidD66 · Accepted solution]

You may not owe a penalty for underpayment of tax.  The IRS will not charge you an underpayment penalty if  (a) you pay at least 90% of the tax you owe for the current year, or (b) pay 100% of the tax you owed for the previous tax year (110% if your if your taxable income is $150,000 or more), or (c) you owe less than $1,000 in tax after subtracting withholdings and credits.  So, just because you owe more than $1,000 does not mean you will owe a penalty.