Last year, I gave birth to my son and I got 5 months income from Washington state paid family and medical leave, and the income is almost the same as my regular income show in my W2. And so I got 1099G form from the state, but it shows zero federal tax withhold. In this way, my W2 only held around 7 months of my federal tax, and I didn't pay for any federal tax for the other 5 months which comes from 1099G form.
So when I file my tax, I found I need to pay for a $385 underpayment penalty.
But I don't know why the state doesn't hold any federal tax when I got paid from paid family and medical leave. Am I eligible to apply for the penalty waiver for this reason?
Thanks!
