Illinois -Turbotax entering late penalty on estimated payments.

Forum|Forum|4 years ago
February 22, 2022
3 replies
49 views

Problem seems to be that I received an unforeseen substantial lump sum of income in December. The first 3 estimated payments were equal like the state likes. So my 4th payment was a lot higher than the first 3. And Turbotax takes my total tax divided by four and assesses a penalty on the first 3 payments. I can't find a way to accommodate this. Does anyone have an idea how to handle this?

Mike9241

Level 15

did you enter your prior year tax.

Illinois works differently than federal

the required total payments are the lesser of 100% of your 2020 tax or 90% of your 2021 tax

1/4 must be paid in each quarter

so based on 2021 taxes being higher than 2020. 1/4 of your 2020 taxes need to be paid in each quarter.

if you had withholding Turbotax automatically allocated 1/4 to each quarter regardless of the amount actually withheld each quarter.

you can override this on the form line 10a if your withholding varied from quarter to quarter.

note. that when I this some years ago Illinois disallowed the specific allocation. I had to actually send it paystubs that showed the withholding I was claiming. I did prevail in the end.

then you have to look at penalty w/s 1 for the calculations. Turbotax as far as I can see uses the actual estimated tax payments each quarter based on the entries in the tax payment worksheet.

so what's occurring in your version of TT is different than what occurs in my desktop version as far as the estimated tax payments credited to each quarter.

no one except a Turbotax agent can review your return to see what is happening.

Mike9241

davetmAuthor

Level 2

I didn't enter last years tax. It was quite a bit higher. But my last payment for this year plus the first 3 payments were more than my taxes. So I'm over the 90% mark. Does TT monitor this forum? Maybe they can help.

Thanks for the info.

AmyC

Level 15

IL looks at each payment and when it was made. So, you could have paid the full tax amount but made a payment late or an insufficient amount so that there is still a penalty. IL answers, How can I be assessed a penalty if I pay the tax by the due date?

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