On the face of it, that doesn't seem right..
BUT
IF, in addition to your withholding, you made any separate Quarterly Estimated tax payments late in the year (fewer than 4 payments) , or made 4 unequal Quarterly Estimated tax payments during the year, that penalty could easily be correct, based on the initial default calculations used. If this is your situation, you could "possibly" reduce the penalty by running thru the Annualized Income method (form 2010AI ) , But that's a pretty painful process and not likely to be worth the effort for $26.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
