What you are calling a penalty is actually interest on the underpayment. TurboTax asked you whether you wanted to have the state Division of Taxation calculate the interest. You must have chosen that option.
The screen that asks that question is confusing. You have to read it very carefully. It doesn't ask you if you want TurboTax to calculate the interest. It asks if you want to have the state calculate the interest or if you want to "see if you can reduce the interest." If you click the "Calculate" button you are choosing to have the state, not TurboTax, calculate the interest. If you want TurboTax to calculate it, you have to click "Reduce Interest," and then answer the follow-up questions. The screen might subtly nudge you towards having the state calculate it by telling you that "If you choose Calculate, you don't have to provide any other information."
Thanks!
Before I posted my question, I opened TT with my 2022 file (didn't save) and tried to find something that would relate while doing state taxes. I didn't find anything, but I probably didn't take the route that would get me to the screen you're showing. However, there's a caveat at the bottom of the screen saying that I won't be able to file electronically if I choose the Calculate option. Assuming I chose that option, because certainly that's what it seems like I did, I was indeed allowed to file and did file electronically and made payment electronically also. So, it looks like there's something out of kilter here.
Did your return not have any penalty on it? Or is the state billing you for more? Turbo Tax only calculates an estimated amount. It is common for the IRS or state to send you a bill or even a refund on it.
If TurboTax calculated the interest it would be on Form NJ-1040 line 52.
The tax shown is just the tax amount. The line for Interest on Underpayment of Estimated Tax has a blank amount. The All Forms version of the pdf does not show any form 2210 or worksheet for it. So, there was no evidence of a penalty (interest) on the 1040. When I, now, try to calculate the interest owed manually, I do get close to what I am being billed by the state. They are not asking for additional interest - it's only the interest I should have paid originally.
I chose the option to let the state Division of Taxation to calculate the interest for my 2023 NJ tax return. My bank account was billed exactly the amount I owe (line 67). Does that mean I do not owe interest or penalty, or will they send me a separate bill for interest/penalty?