CA underpayment penalty waiver

[DonM94556]

I received a late payment in 2022  from my parents trust.  I was not aware that a portion of the proceed were taxable until I received a schedule K-1 in February.  I was able to request a waiver of underpayment penalties on my federal tax return via TurboTax, but I cannot find a similar option for my CA return.  Any suggestions?

[hbl3973]

DonM94556,

https://www.ftb.ca.gov/forms/2022/2022-5805-instructions.html  does list the way to request a waiver via form 5805 which one may optionally use to hopefully reduce or eliminate underpayment penalties and interest.  I don't know how to access this form using TurboTax online, but if you are using a desktop version, you switch to Forms view, click on Open Form, and type 5805 in that search box.  (There is a procedure to buy a desktop version and transfer your online TurboTax info to the desktop.  You then use the desktop version and do not efile with the online one, i.e. stop using the online one.

[DonM94556]

Thank you for the lead.  I am using TurboTax Desktop and can go to the form and enter my reason to request the waiver.  Unfortunately, I would have to override most of the rest of the form to fill it out which means I can't file electronically.  The Federal version of the TurboTax allows users to request waivers via the Step-By-Step forms.  I don't understand why they don't provide the same functionality for state tax returns.

[hbl3973]

DonM94556,

I'll definitely suggest to the powers-that-be to include that in their enhancement request list.  Makes a ton of sense.  

I don't grok why you would need to file on paper, but I've never used that particular option when filling out a 5805 to apply the annualized income method.  I just went into the 5805 form, checked the waiver Yes box and used the QuickZoom button to type in the waiver request.  Could you explicate your insight on that issue?

[hbl3973 · Accepted solution]

The TurboTax folks got back to me and were able to get that option in Step-by-Step.  The reason I couldn't get that option was because TT looked at my last year's return and found that our CA tax was less than $500.  Take a look at the 5805 worksheet under Forms View and see if there was an exception code 1 or 2 that exempted you from 5805 penalties and interest.

[DonM94556]

Thank you for this information.  Yes, to my surprise, I qualified for exemption code 1.  I was so worried about the 90%/100%/110% rules that I never realized other circumstances could eliminate underpayment penalties.

Thank you for your help.

[hbl3973]

Glad you can now move expeditiously forward.