We live in NC. We work from NC. My husband's company deducted both IL and NC state taxes from his W2. This was incorrect. All of the state tax deductions should have gone to NC. They cannot fix the W2.
We make quarterly payments in NC since I am self-employed. For the 4th payment, I intentionally overpaid the 4th amount by the amount that was accidentally sent to IL, essentially sending NC the amount they should have received from his W2.
I have filled in a non-resident return for IL to get that tax back. No problem there.
However, in the North Carolina return, it is correctly calculating that we have a small refund overall BUT it's also saying that we have a small "underpayment interest" charge. Is this because NC was underpaid NC taxes throughout the year because of my husband's employer's error or should TurboTax not be calculating an interest penalty since my 4th "estimated taxes" payment more than paid the amount NC should have received that went to Illinois instead? Is the underpayment penalty a result of NC receiving their money later in the year (technically January 2022 for the 4th estimated payment) instead of throughout the year?
