Cannot annualize Oregon withholding to avoid unowed underpayment interest

[DarthVaderKamp]

For computing the underpayment penalty Oregon says "Withholding is treated as if it were paid
in equal amounts on the due date for each required installment payment unless you can show that it was paid differently. " I can show that it was paid once, early in the year. How can I get TurboTax to generate the OR Form 10: Underpayment Statement to show unequal withholding?

This question was answered in 2023 but the proposed method is not working. I cannot directly modify the Underpayment Statement in Forms and, unlike the federal section, the Oregon section of EasyStep does not appear to provide a method to annualize withholding.

[BillM223]

Near the end of your state interview, TurboTax should realize that you owe state tax. Are you sure that you owe Oregon more than $1,000? If you owe less, then the whole underpayment process won't appear.

If, by this point, you owe Oregon more than $1,000, on the screen "A few things before we wrap up your state taxes", look at subheading, "Other situations". Go down to "Underpayment Interest (Form 10)". Going through this sub interview while allow you to make the entries that you want.

If you don't see this entry to Underpayment Interest, then something about your return is blocking it.

For example,

1. Is your OR tax due less than $1,000?

2. Was the OR tax paid in 2024 greater than the tax due in 2025?

3. On the screen for "Underpayment of Estimated Tax Exceptions", you clicked on one of the exceptions to owing any underpayment penalty.

[DarthVaderKamp]

Thanks for the quick response. Yes, I owe more than $1000 and did complete the Underpayment Interest (Form 10) section. When I select the annualized income method, the following screen allows me to annualize my income but not my withholding.

[DarthVaderKamp]

When I complete the Underpayment Interest (Form 10) section, TurboTax creates the Underpayment Statement form below showing the withholding evenly distributed across all 4 quarters even though all $933 was withheld in the first quarter. This results in underpayment interest I do not owe so I would like to know if I can force TurboTax to list all my withholding in the first quarter where it occurred. There are extra questions in the Federal interview that allow this but not in the Oregon interview and I cannot force the change directly in Forms.

[DarthVaderKamp]

I'm not sure why the Underpayment Statement image is not displaying so trying again.

[BillM223]

For reasons not clear to us, images are often not displaying in the Community this year. It's not you.

Offhand, I don't see a way in the Online product (which I assume that you are using) to override how TurboTax allocates the withholding quarter by quarter. Not all the states and the federal products have been programmed the same way.

So far as I know, you would have to have the desktop version to make such an override.

You can buy and download the desktop product here.

[DarthVaderKamp]

I am using the desktop version (Deluxe for Mac). Can you please provide detailed instructions since I was unable to modify the values directly in Forms?

[DarthVaderKamp]

It's been a couple weeks since I posted my question and still no answer on whether/how my issue can be addressed. Can you please provide clear and detailed instructions on how to do this in Desktop Deluxe for Mac so I can file my taxes? 

[DaveF1006]

Try this to see if it works.

If working in the desktop version

1. Click the Forms icon (top right).
2. In the left-hand list, find Form OR-10 and the Underpayment Interest Worksheet.
3. Scroll down to Part C—Figure your underpayment interest.
4. Find Lines 13, 18, 23, and 28 (the lines for "Withholding").
5. By default, these will have a formula dividing your total withholding by 4. Right-click on the first cell (Line 13) and select Override.
6. Enter your Total Withholding in the first column (Q1) and enter 0 in the remaining three columns.
7. Verify that Line 31 (Total underpayment interest) updates to a lower amount.

If working in TurboTax Online

1.  Go to State Taxes > Oregon. 
2. Continue to the "Underpayment Interest" (or Form 10) section.
3. Instead of just selecting "Annualized Income," look for a question that asks: "Do you want to use the actual dates your withholding was paid?" or "Would you like to enter your withholding by quarter?"

If the software doesn't ask this, you may need to go back to the Federal section -> Other Tax Situations -> Underpayment Penalties. Sometimes, adjusting the Federal 2210 withholding dates will "carry over" the instruction to the state return to use actual dates instead of equal installments.

[DarthVaderKamp]

The instructions do not align with Desktop Deluxe for Mac. There is no right click "Override" option. Are these instructions for the Windows version? Regardless, the software does allow me to change the smart worksheet below but this does not impact the value in line 4 which apparently the program sets:

The program generates the following statement (referenced in line 4 above) but does not allow me to edit the values:

So I am still stuck.

[MonikaK1]

I just tried editing a form in my Mac and I had the same experience - you can't right click in a cell and edit it, on any form or worksheet I tried.

You could try deleting the forms and worksheets related to this issue and enter the information in the interviews about the withholding and other payments again for Federal and State. You could also choose in the interview section to allow the state to calculate the penalty and respond to their notice if you disagree with their calculation.

The Form OR-10 instructions explain the Oregon penalty calculation.

I will elevate the question regarding the lack of ability to edit forms in the Mac version.

@DarthVaderKamp