Wrongly included penalty in California return on line 92 of form 540

Forum|Forum|2 months ago
May 15, 2026
1 reply
393 views

Hello all,

TurboTax 2025 updated itself and after that I went to taxes due from refund for California upon investigation I found that it is including a penalty in line 92 for me. This seems to be incorrect as I had healthcare coverage and also I had saved copy of my prepared return from the earlier version of TT and this penalty was not there.

I tried editing the form 3853 manually or the line 92 of form 540 in the forms mode and it is not allowing me to do so.

Please help with this.

JotikaT2

Employee Tax Expert

You will need to make the entries in the state interview section of the program.

If you are using TurboTax Desktop, select the California tab to get to the interview screens again.

Proceed through the screens until you see "Health insurance coverage in 2025."
Be sure the circle to the left of We all had health insurance coverage all year is marked. Select Continue.
On the next screen titled "Less common plans," select yes or no as it applies to your situation. If you are able to select no, then there should not be a penalty on your return. If you need to select yes, then you will have to answer more questions about the type of health insurance coverage you had.

As long as you had health insurance coverage for the entire year, the penalty on the state return will be removed from line 92 and you will see the box checked on the form instead indicating full year coverage.

If you are using TurboTax Online, you will need to log back into your program, then select State on the left panel. Select Your state returns and select Edit/Continue to the right of your return to proceed through the interview screens. You will see the "Health insurance coverage in 2025" screen. Follow the same steps as listed above to confirm your health coverage for the year.

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