There's a longstanding bug with TurboTax Desktop edition (may be online version also has this bug but I don't use it). For tax year 2022 My MA taxes withheld were less than the total MA tax I owed. So as part of the state interview TurboTax fills out form M-2210 to calculate the penalty for Underpayment of Massachusetts Estimated Income Tax. This forms takes into account both taxes withheld and estimated taxes I paid during 2022. If the calculation determines that the penalty is at least $1 everything works correctly and the completed form M-2210 is included with E-file'd return. However if the penalty ends up as zero because you paid enough estimated taxes form M-2210 is not included in the E-file and not printed or saved during E-filing step. Note even when penalty is zero M-2210 still needs to be included with the filed return if tax withholding alone didn't cover your tax liability and your remaining tax due is more than $400. This is particularly important when Annualized Income Installment Method is used since the state tax authority (MA Department of Revenue) has no information about your uneven income in each quarter. So even with zero penalty you still need form M-2210 filed (for remaining tax due over $400) to prove that your penalty is indeed zero.
How do I know M-2210 is not filed when calculated penalty is zero? First I noticed M-2210 is not included in the list of saved or printed forms when you go through E-filing process. Second after E-filing I called MA Department of Revenue and confirmed with them that my return did not include M-2210. So I had to refile my MA return by regular mail instead of e-file. I first noticed this problem in 2018 with my 2017 MA return. And this problem is still here in 2023! I verified that the bug is present for both annualized and non-annualized methods to determine if you owe a penalty.
Please fix this bug. Without the fix people who diligently pay estimated taxes to make sure the underpayment penalty ends up as zero can't e-file their MA returns with TurboTax especially when annualized method is used to achieve zero penalty.
