I agree your situation is confusing, and you may want to review your documents and the instruction pages and print out with your completed tax return.
TurboTax can’t set up a payment plan. In the past, TurboTax had the option to request a payment plan from the IRS, but requesting a payment plan in this method instead of requesting directly on the IRS website, carries a very high nonrefundable fee. I believe that for 2020, and possibly 2019 as well, the payment plan option was removed from TurboTax and if you could not pay what you owed in full, TurboTax would recommend that you go directly to the IRS website and sign up for a payment plan. If you did this, you would get an instant answer as to whether the payment plan was approved and you would get instructions from the IRS on how to complete the payment plan. Payment plans always include a nonrefundable fee at the time of application, so you will need to make sure that you actually paid such a fee. If not, then you did not request a payment plan and you may be confused about what you actually did.
If you owed income tax on your 2020 tax return, TurboTax may have printed out vouchers to make estimated payments for your 2021 tax return. This is not a payment plan for your 2020 taxes, this is a way to make advanced payments to the IRS for next year’s taxes so that you don’t owe at tax time, because if you owe at tax time, you are usually be assessed a penalty with interest. You aren’t required to use the vouchers, they are only a recommendation, and they will not take into account any changes to your tax situation. If you want to know whether you should make estimated payments to the IRS, you can use the withholding an estimated tax calculator at the IRS website.
