I only had retirement income last year from two different sources: 401K, and a pension. Both 1099-R show that nothing was withheld for state taxes. I have to pay penalty?

[Flaresideman]

TT shows I'll have to pay a penalty on my state tax return for underpayment of state taxes.  No penalty on the federal return.  To avoid the state return penalty next time, should I just adjust my W4 for a new job I just started to have enough state taxes withheld?

[ToddL99 · Accepted solution]

Yes, you can help avoid underpayment penalties by adjusting your W-4 to increase state withholding.

You can also contact the plan administrators for your 401K and/or your pension and ask them to withhold state taxes. This might be a better solution if you are going to continue getting the retirement income but may not keep your "post-retirement" job.

[Flaresideman]

Great!  thanks for advice!