Hal_Al, thank you. This is what I was missing:
At the time you file your taxes, TurboTax (TT) will prepare Schedule AI (annualized Income) of form 2210 to claim the penalty exception. It is not automatic. You will be asked at the "Other tax situations" section of the program, if you want to file that form.
I had not looked at that option in TT before.
Will using Schedule AI have any effect on my federal taxes as well?
A. Simple answer: No.
Good. That helps clarify things as well.
