State tax filing

I have now reviewed the file and the California instructions for the form and underlying statute further with one of our Leads.

The online instructions for Form 5805, Part II, Step 5 are confusing in that they state:

If the California AGI shown on your 2024 California tax return is more than $150,000, or more than $75,000 if married/RDP filing a separate tax return, then enter 110% (1.10) of the tax liability from your 2024 tax return on line 5 (which would be a smaller amount than shown on your form).

But, they also state:

If the California AGI on your 2025 tax return is equal to or greater than $1,000,000/$500,000 if married/RDP filing separately, enter 90% (.90) of the tax liability from your 2025 tax return on line 5 (which would be the same as the amount in Step 2, which is what is shown on your form).

(The taxpayer can't enter both amounts in the same step.)

However, in step 6, the form specifically states: Required annual payment. Enter the smaller of line 2 or line 5. If your California AGI is equal to or greater than (the threshold amount), use line 2.

California Revenue and Taxation Code Section 19136.3 specifically states that the standard "prior year tax" safe harbor shall not apply if the individual's AGI for the taxable year is over the threshold amount.

So, even though the California instructions for step 5 in Part II are confusing, in your case TurboTax correctly used Line 2 for Step 6 so the calculation of the penalty is correct.