PA Underpayment of Estimated Tax

Forum|Forum|4 years ago
February 18, 2022
1 reply
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In 2021 I paid in to Pennsylvania ~6x the amount of income taxes due in 2020 in an attempt to meet the states Safe Harbor rules for estimated taxes. Despite paying in ~6x the amount of income taxes due in 2020 I still owe income tax in PA for 2021 which was expected but for some reason TurboTax is calculating an underpayment penalty and interest despite me paying in almost 600% of the prior year tax liability. I can't seem to figure out why that is or how to correct it or why the Safe Harbor rules are not applying here?

TomD8

Alumni - Champ

I have no idea if this is the issue, but note that estimated tax payments must also be "timely" in order to avoid a penalty. This reference explains how PA calculates its penalties:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/392

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

TROSAuthor

Level 2

The payments were made throughout the year with most of the payments occurring on 6/1/21 as that is when the income was received. The 2021 payments that equated to ~600% of the prior year tax liability were withheld from W-2 income and remitted throughout the year.

TomD8

Alumni - Champ

From the PA tax website:

"If you received your income unevenly and you did not make equal payments throughout the year, you may have to claim your safe harbor by completing a REV-1630."

https://revenue-pa.custhelp.com/app/answers/detail/a_id/392

And see this previous TT answer:

Where can I find my rev 1630 form? (intuit.com)

**Answers are correct to the best of my ability but do not constitute tax or legal advice.