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TROS
Returning Member

PA Underpayment of Estimated Tax

In 2021 I paid in to Pennsylvania ~6x the amount of income taxes due in 2020 in an attempt to meet the states Safe Harbor rules for estimated taxes. Despite paying in ~6x the amount of income taxes due in 2020 I still owe income tax in PA for 2021 which was expected but for some reason TurboTax is calculating an underpayment penalty and interest despite me paying in almost 600% of the prior year tax liability. I can't seem to figure out why that is or how to correct it or why the Safe Harbor rules are not applying here? 

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3 Replies
TomD8
Level 15

PA Underpayment of Estimated Tax

I have no idea if this is the issue, but note that estimated tax payments must also be "timely" in order to avoid a penalty.  This reference explains how PA calculates its penalties:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/392

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
TROS
Returning Member

PA Underpayment of Estimated Tax

The payments were made throughout the year with most of the payments occurring on 6/1/21 as that is when the income was received. The 2021 payments that equated to ~600% of the prior year tax liability were withheld from W-2 income and remitted throughout the year. 

TomD8
Level 15

PA Underpayment of Estimated Tax

From the PA tax website:

 

"If you received your income unevenly and you did not make equal payments throughout the year, you may have to claim your safe harbor by completing a REV-1630."

https://revenue-pa.custhelp.com/app/answers/detail/a_id/392

 

And see this previous TT answer:

Where can I find my rev 1630 form? (intuit.com)

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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