Enter what amount of income was earned in each quarter.
The purpose of Form 760C is to "annualize" your income. The government's default position that your income was earned evenly throughout the year. Therefore, they expect to receive payments throughout the year and are allowed to assess penalties and interest if those payments are delayed or did not occur.
Form 760C reports that income was not earned evenly and reports the periods that income was earned so that any penalties or interest are mitigated.
TurboTax is flagging this form to minimize any underpayment penalties and interest.
See 2020 instructions for Form 760C Underpayment of Virginia Estimated Tax by Individuals, Estates and T..., Who Must File Form 760C:
There are four installment periods for determining whether you underpaid your tax during the year.
For calendar year filers, the due dates for each installment period are: May 1, June 15, September 15, and January 15.
Fiscal year filers should refer to Virginia Form 760ES and the instructions to determine their installment due dates.
If your tax is underpaid as of any installment due date, you must file Form 760C. The form must be filed even if you are due a refund when you file your tax return.
Since underpayments are determined as of each installment due date, an overpayment in one installment period cannot "cancel out" an underpayment in a previous period. You must also file Form 760C if you were liable to make payments for less than four installment periods during the year (see the instructions for Line 5).
You are not required to file Form 760C if your income tax liability after subtracting the Spouse Tax Adjustment and tax credits is $150 or less, or if you were not required to file an income tax return.
You may have also been asked about when income was earned on the federal return, or via Form 2210. For more information: How do I add Form 2210?
