Arizona tax form 221

[fathergainz]

We paid only $ 671 of $ 3,063 tax owed for Arizona state tax during 2025.  Since this doesn't meet the 90%, it appears we would have to pay a penalty for underpayment; however, form 221 is showing box 1 checked claiming an exception.  How do we qualify for an exception?   

As information, we overpaid on our federal taxes and will be receiving a refund of $ 3,501.  Would this have anything to do with it?

Thanks!

[DawnC]

No, your federal refund would not affect a state penalty.   How much was your AZ total tax in 2024?   To avoid an Arizona state underpayment penalty, ensure your total withholdings and timely estimated tax payments equal at least 90% of your current year's tax liability or 100% of your previous year's tax (110% if AGI > $150,000).

[fathergainz]

Total tax liability for 2024 was $ 2,508 and we did not make any additional estimated payments during 2025.  We only paid $ 671 through payroll deductions.  I think we owe the penalty, but turbo tax says we do not.  Any thoughts on why turbo tax is claiming the exception on form 221?  Thanks!