I'm told that I have a Possible Penalty. I'm working through the Possible Penalty Exception? In order to avoid some or all of the penalty, I have to answer "yes" to all of these questions:
- Was your 2020 tax liability zero.
- Was your 2020 return covering a full 12-month period?
- Were you a US citizen or resident in 2020?
I was a citizen; my return covered a full 12-month period; but what is tax liability? We worked and we paid our taxes but we received Federal and State refunds. Was my tax liability zero? Is that asking if I worked? Or is it asking if I had to pay Federal and State taxes (which we did not since we received refunds).
