We are residents of Virginia. We own a portion of a Delaware S-Corporation which withholds estimated taxes for us.
The total tax due for Delaware is (round numbers) $8,000. The S-Corporation withheld $10,000. Thus, we should be due a $2,000 refund.
In the State Tax section of "S Corporation Tax Payments and Refundable Business Credits", the first entry is for estimated S-Corporation payments. I enter the $10,000 there (no minus sign).
However, after doing that, it is calculating a penalty. When I look at the Tax summary on the form PIT-UND (Personal Income Tax Underreporting), it is showing:
In the "REQUIRED ANNUAL PAYMENT" Section:
C. Enter the smaller of "A" or "B". This is your required amount. $8,000
D. Delaware withholding -$10,000 (note the minus sign!!!)
E. Subtract Line D from Line C. If $800 or less, stop here. You do not owe penalty. $18,000 (it should be -$2,000)
In the "SHORT METHOD" it is showing:
F. Enter the amount of estimated tax payments, S Corp Payments, or Business Credit $10,000 (this is correct!)
G. Delaware Withholding -$10,000 (again negative <---where is this coming from????)
H. Add line F and G $0 (should be $10,000)
I. Total underpayment (subtract H from C) $8,000 (should be negative $2000 since I overpaid!!)
J. Multiply I by 12% $960
L. Estimated Penalty $960
And then it is subtracting the $960 from my refund of $2,000, and only giving me a refund of $1,040.
Question - I can only find 1 place where I entered the $10,015. Is there any other reason why it is looking at my withholding as a negative amount???? and charging me the penalty. Also, after I enter the refundable credit, it says that I don't owe a penalty... but then obviously it is there on the form and also on the Tax summary.
Thoughts?
