I have never before seen "For purposes of figuring the underpayment penalty, you may elect to treat the tax withheld as paid when it was actually withheld" what is this?

[DawnC]

You have an underpayment penalty and TurboTax is asking you if you want the software to calculate it and add it to your return.  The best thing to do is to decline TurboTax's offer to calculate the penalty and let the IRS send you a bill later or after you pay the taxes.  The calculation is almost always off by a few dollars and you end up getting a bill anyway.

Plus, when you get the bill, you can apply for an abatement of the penalty if it is your first time, although the interest can't be abated.  

[dmertz]

When preparing Form 2210 to calculate an underpayment penalty, by default your tax withholding is treated as having been withheld equally in each of the four tax quarters of the year.  However, if you actually had a larger amount of tax withholding in earlier quarters than in late quarters, your underpayment penalty will likely be reduced or eliminated by treating the withholding as paid when withheld instead of treating it as paid in four equal payments throughout the year.