I have received a Virginia VK-1 that includes a PTET credit. This PTET credit is accurately reflected on my VA760 line 25 and I am receiving a refund from Virginia.
The odd thing is that VA760 line 32 shows a penalty related to underpayment. This appears to be due to the fact that Form 760C line 1 is not considering the PTET credit and using VA760 line 18.
The Virginia instructions for 760C line 1 are "Start with the tax liability reported on your income tax return.
Subtract the Spouse Tax Adjustment and tax credits and enter the result here."
It seems that Turbo Tax is neglecting including credits, specifically the new PTET credit, when determining if an underpayment has occurred in Virginia. Overriding 760C line 1 will address the issue, but this seems like a defect/bug in Turbo Tax.
@PatriciaV based on other questions, you seem to be familiar with Virginia PTET, what are your thoughts?
