California underpayment penalty Exception based on last year's tax

[aiueo]

I'm trying to reduce underpayment penalty for CA.

There is a section you enter information to see if you qualify "Exception based on last year's tax."

There is a box where you enter " 2019 tax liability" and "2019 AGI".  My income in both 2019, and 2020 were over $150,000. Am I supposed to enter the exact tax liability amount shown in 2019 CA tax return? or should I calculate manually 110% of 2019 CA tax liability and enter the amount?   I think Turbotax should automatically calculate 110%, but looks like it doesn't do so.

Is it a program error??  or my misunderstanding?  

 ( I didn't pay any estimated tax payment and all were withholding on W2.  My withholding of 2020 was more than 100% of 2019's tax liability, but less than 110% of 2019 tax liability. so I believe I have to pay penalty. Therefore, I'm thinking of using annualized method. ) but somehow Turbotax treats my return as if it meets exception if I enter just exact amount of 2019 CA tax liability instead of 110%.  If I enter 110% of tax liability in the box, it does calculate penalty though.

[AmyC]

You only want to enter 100%. If you enter 110%, you would have a penalty as you would not have withheld enough to cover last year. As long as you withheld 100% of 2019, you would not have a penalty. 

See Common penalties and fees | FTB.ca.gov and Penalty reference chart 

[aiueo]

Thanks for the comment.

but I'm still confused because FTB's instruction says as follows.

My AGI in both prior year and current year were over $150,000, I should have withheld 110% of prior year tax liability to avoid penalty. 

The following is copied from FTB's instruction fore Form 540 

https://www.ftb.ca.gov/forms/2020/2020-540-booklet.html

Line 113 – Underpayment of Estimated Tax

You may be subject to an estimated tax penalty if any of the following is true:

• Your withholding and credits are less than 90% of your current tax year liability.
• Your withholding and credits are less than 100% of your prior year tax liability (110% if AGI is more than $150,000 or $75,000 if married/RDP filing separately).
• You did not pay enough through withholding to keep the amount you owe with your tax return under $500 ($250 if married/RDP filing separately).
• You did not make the required estimate payments, if you pay an installment after the date it is due, or if you underpay any installment, a penalty may be assessed on the portion of estimated tax that was underpaid from the due date of the installment to the date of payment or the due date of your return, whichever is earlier. Get the 2020 form FTB 5805, Underpayment of Estimated Tax by Individuals and Fiduciaries, for more information.

[aiueo]

Also, Form 5805 shows as follows:

If you meet any of the following conditions, you do not owe a penalty for underpayment of estimated tax. Do not complete or file this form if:

• The amount of your tax liability (not including tax on lump-sum distributions and accumulation distribution of trusts) less credits (including the withholding credit) but not including estimated tax payments for either 2019 or 2020 was less than $500 (or less than $250 if married/RDP filing a separate return).
• Your 2019 return was for a full 12 months (or would have been if you were required to file) and you did not have any tax liability on that return.
• The amount of your withholding plus your estimated tax payments, if paid in the required installments, is at least 90% of the tax shown on your 2020 return or 100% of the tax shown on your 2019 return (110% if California adjusted gross income (AGI) was more than $150,000 or $75,000 if married/RDP filing a separate return) and you are not using the annualized income installment method. Taxpayers with California AGI equal to or greater than $1,000,000 (or $500,000 if married/RDP filing a separate return), must use the tax shown on their 2020 tax return if they do not meet one of the two conditions above.

[AmyC]

You should enter the actual tax liability and AGI for last year and the program should be able to see that your incomes exceeds $150,000 both years and calculate the 110% then the penalty.

Did you try the annualized method? If is was all wages, I would not expect help.

There is nothing in investigations.  You can fill this form out for someone to call you. Let them look at your screen.

You can also reply back with a diagnostic token for someone to take a look.

• If you are online, go to tools > share file with agent > 6 digit number pops up. Reply with it here and tag me.
• If on desktop, go to online >send tax file to agent > number pops.