I am using TurboTax Deluxe 2022 on a Windows desktop. It appears to incorrectly calculate the penalty for underpayment of Maryland state and local taxes. On 2/23/2022, Maryland government extended the deadline for payment of estimated taxes for Q1 and Q2 of 2022 to 7/15/2022:
"Effective February 23, 2022, the due dates for the first and second quarter individual income tax estimated payments for tax year 2022 have been extended to July 15, 2022."
Accordingly, I made the combined estimated tax payment for Q1 and Q2 of tax year 2022 on 7/13/2022, i.e. before the extended deadline. However, TT apparently considers these payments late, i.e. not made before their respective non-extended deadlines (4/15/2022 for Q1 and 6/15/2022 for Q2). So TT incorrectly attributes both payments to Q3, together with the Q3 payment I made on 9/13/2022 (before the non-extended 9/15/2022 deadline). Consequently, TT creates a Maryland Form 502UP and calculates that I owe an underpayment penalty, which I do not.
This is a BUG in TT. When should we expect a fix?
[Edit1]
To illustrate the bug, let's assume that the filer had $4,000 of Maryland state + local taxes withheld on the 2022 W-2, and also made 4 quarterly estimated tax payments of $200 each, with the Q1 and Q2 payments made on 7/15/2022 (extended deadline, as described above), Q3 payment on 9/15/2022 and Q4 payment on 1/15/2023 (both non-extended deadlines).
Then the proper calculation of tax payments per quarter on the MD Form 520UP is (note that the quarterly amounts are cumulative:(
Q1 $4000 * (1/4) + $200 = $1200
Q2 $4000 * (2/4) + 2 * $200 = $2400
Q3 $4000 * (3/4) + 3 * $200 = $3600
Q4 $4000 * (4/4) + 4 * $200 = $4800
But instead, TT calculates the following:
Q1 $4000 * (1/4) + (zero estimated payment) = $1000
Q2 $4000 * (2/4) + (zero estimated payment) = $2000
Q3 $4000 * (3/4) + 3 * $200 = $3600
Q4 $4000 * (4/4) + 4 * $200 = $4800
This may result in an underpayment penalty incorrectly calculated for Q1 or Q2 or both.
[Edit2]
One temporary workaround might be to enter non-extended dates for Q1 and Q2 estimated tax payments; this way, TT should not calculate the incorrect penalty. However, in case of an audit, these dates would not much the actual payment date in the filer's records. So this is not a permanent solution.
