Indiana Underpayment Penalty

[RonLou]

I overpaid Indiana State estimated taxes quarterly and on time. I am getting a refund. Turbotax keeps trying to calculate an underpayment penalty. Every time I do a review the program says I have to calculate the penalty. If I just ignore this and file will there be a problem?

[MaryK4]

Yes, possibly. TurboTax will only apply the penalty if the state would based on the amount on the return.  In this case the IT-2210 is required to figure the penalty you owe or show you're exempt.

If you go through the penalty section, you often can qualify for an exemption of the penalty,

You may owe a penalty if:

• You didn't pay any estimated tax,
• You didn't pay enough estimated tax, or
• You didn't make your payments on time.

[RonLou]

Mary, I think your answer would normally be correct, but none of those three instances apply. We paid estimated taxes on time. Also, because of Covid, we were not required to take RMD, so we ended up overpaying enough estimated tax to get a $1,700 refund. My concern is that Turbotax will raise a red flag if I ignore the form that wants to calculate a penalty, and my electronic filing will bounce. Even paranoid people have real enemies. Thanks for your reply. Ron R.

[LenaH]

Your first two quarterly payments might have defaulted to a payment date of 7/15/20, which might be triggering your penalty. Please go back to the estimated payments screen and edit the dates so that they reflect the dates you actually made the payments.

To get back to your estimated tax payments in TurboTax, you can follow these steps: 

1. Open your tax return.
2. Search for estimated tax payments with the magnifying glass tool on the top of the page. 
3. Click on the Jump to estimated tax payments link at the top of the search results.
4. Click on Edit next to State estimated taxes for 2020.
5. Enter the correct dates of your estimated tax payments. 

@RonLou

[RonLou]

Unfortunately that did not work. I even tried starting over with the state form. The dates are correct. It seems as if the default dates are imprinted in the program and won't go away. Maybe I'll print the forms and do snail mail. That way I can just avoid that form. My guess is that Indiana will know that I paid on time. They cashed the checks.