There is a two year old thread about this exact bug in the "business and farm" forum:
https://ttlc.intuit.com/community/business-taxes/discussion/re-turbo-tax-is-not-considering-virginia...
I'm creating a new thread in the "state tax filing" forum in hopes of getting some traction with the right team. The other thread does a great job of summarizing the issue, so I'll copy some of the text from there:
For Virginia state tax filers, TurboTax Online is not considering the Virginia PTET Credit when calculating underpayment on Form 760C. Line 1 of Virginia Form 760C specifically states: "2025 Income Tax Liability After Spouse Tax Adjustment and Tax Credits" (emphasis mine).
https://www.tax.virginia.gov/sites/default/files/taxforms/individual-income-tax/2025/760c-2025.pdf
Additionally, Virginia's published instructions for Form 760C state: "Line 1 - Start with the tax liability reported on your income tax return. Subtract the Spouse Tax Adjustment and tax credits and enter the result here."
https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760c-instructions.pdf
I have a Virginia VK-1 form with a reported Pass-Through Entity Elective Tax Payment Credit. TurboTax Online is correctly applying the credit when calculating tax owed on my Form 760, but incorrectly does not account for it when calculating underpayment penalties on Form 760C. The result is that TurboTax is erroneously calculating an underpayment penalty of over $900 in my specific situation, when in reality it should be $0. Per the explanation above, this is a very clear bug which has been reported in multiple TurboTax Community threads over the past two years, and it still hasn't been fixed.
Other threads reporting this exact issue with no satisfactory resolutions provided:
- https://ttlc.intuit.com/community/business-taxes/discussion/re-turbo-tax-is-not-considering-virginia...
- https://ttlc.intuit.com/community/state-taxes/discussion/incorrect-virginia-underpayment-penalty-for...
- https://ttlc.intuit.com/community/state-taxes/discussion/re-where-to-enter-pass-through-entity-elect...
Questions for the TurboTax team:
1. Does TurboTax acknowledge this issue as a bug, and if so, what is the timeline for a fix?
2. Is there any workaround available for TurboTax Online Premium users?
3. Has this issue been fixed in TurboTax Desktop?
