2025 WI Form 2, Schedule U: Why is it being created?

[DWC-15170]

Hello -

I am filing Wisconsin Form 2 (Wisconsin fiduciary income tax for estates or trusts) and will be getting a refund 2025... but TurboTax keeps telling me I need to file Schedule U (Underpayment of Estimated Tax by Individuals, Partnerships, and Fiduciaries).  This is obviously erroneous as I actually overpaid (hence the refund).

When I execute the review of my state taxes, Schedule U pops up and the verbiage on the page says:

"You have an underpayment penalty.  Your taxable income on Form 2, line 5 is more than $225,000, or you have nondistributable capital gains on Schedule WD, line 16."

Neither of these conditions is true.  In fact, there is not even a Schedule WD as part of this Form.  (Form 2 uses Schedule 2WD.)  Additionally, Schedule U does not retain any changes when I go into the form to edit it with information such as last year's tax liability, so it looks to me like it might Schedule U might just be buggy? 

One more data point that tells me that may be the issue is that if I go in the view Schedule U in pdf form, I get an error that says "An error exists on this page. Acrobat may not display the page correctly. Please contact the person who created the PDF document to correct the problem."  Schedule U is that only page that I get that Acrobat error... so I do believe the issue is with the software. 

Can someone please review Schedule U for Wisconsin Form 2 and get this fixed?

Thank you.

[DianeW777]

It depends. The tax system, including most states, is pay as you go, when money is earned, the tax is due for each payment period. You can have a refund and have underpayment penalty depending on when the tax was paid. 

Review Form Schedule U-2025 to see if the estimated tax covered the income. If the income was earned equally throughout the year, and the estimated tax was paid quarterly, 

• In general, you may owe underpayment interest for 2025 if you did not pay at least the smaller of:
• • 90% of your current year (2025) tax liability, or 
• • 100% of your prior year (2024) tax liability if you filed a 2024 return that covered a full 12 months. 
  • Note: The alternative to pay 100% of prior year tax liability does not apply to an estate or trust with taxable income of $20,000 or more.
  • WI Schedule U Instructions

If you find you meet the requirements of estimated tax please update with further details and we will help.

@DWC-15170 

[DWC-15170]

Thank you for the response @DianeW777.  I believe you have answered my question as to why Schedule U is being created (it looks like Part I is required for all filers now?), but I am still unsure as to why TurboTax thinks I owe a penalty. 

The Schedule U form itself is filled out correctly by TurboTax using last year's liability and this year's estimated tax payments, and line 12 (Total underpayment for year) shows a negative balance which, according to the form, means there is no penalty (If the result is zero or less, stop here; you do not owe underpayment interest). 

So, I guess I am back to wondering why:

1) TurboTax thinks I owe an underpayment penalty?

2) Why is Schedule U causing an error message in Adobe?  (Apologies for the lack of details on this second part.  As I mentioned in my original post, I simply get a message that says "An error exists on this page. Acrobat may not display the page correctly. Please contact the person who created the PDF document to correct the problem.")

Thanks for your help! - Don

[PatriciaV]

Check the math on Schedule U Line 24 to confirm the amount shown is the total of Lines 22 and 23 subtracted from Line 20.
You might also complete Part IV to annualize the income by quarter. Often this calculation will eliminate underpayment penalties (although we agree that with an overpayment on Line 12, no payment or penalty should be due).

The message in Adobe when viewing TurboTax forms has been submitted to our development team for further research. Fortunately, this doesn't affect the printing or e-filing of the forms.

[DWC-15170]

Thank you, @PatriciaV.  The e-filing portion is what I was really concerned about, so that is helpful.

I was able to use the Short Method (Part II) as I made quarterly deposits of equal amounts, so I never get to Part III or IV.  It shows that I do not owe any underpayment interest (i.e. line 15 is 0) so I think we're all good.  I was just concerned that the error affecting Adobe might affect the e-filing of the return.

Thanks again for your help! - Don