Potential Bug in California Form 5805 – Incorrect Tax Amount in Part II, Line 5 Causing Incorrect Underpayment Penalty

[Daniel123456]

Hi,

I noticed a possible issue in TurboTax when filling out California Form 5805 (Underpayment of Estimated Tax).

In Part II, Line 5 (which should pull the tax shown on my 2023 tax return), TurboTax is incorrectly using the value from Part II, Line 2 (90% of Line 1) instead of the correct tax amount from the California Carryover Worksheet.

When I use Forms Mode and click on the incorrect value in Line 5, it correctly links to the appropriate number on the California Carryover Worksheet, but it does not actually transfer that number to Form 5805.

This mistake causes an incorrect calculation of the California safe harbor rule and wrongly applies an underpayment penalty even though I should have qualified for safe harbor.

Has anyone else experienced this issue? Is there a workaround to manually override or fix this?

Thanks!

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all other states that are included on the return.

[Daniel123456]

My token # is: 4626 7452 5438 5675 - 7757 7752. The only state used is California. Thanks! 

[KeshaH]

Thank you for sending over the token, however it seems you sent over the file of a blank return. Can you resend your token from within the return that has the incorrect Form 5805?

[Daniel123456]

Here is the updated one: 4626 7452 5438 5675 - 1871 1779.

[KeshaH]

Thank you for sending the updated token.

Because of the level of income that you earned in 2024, the estimated tax safe harbor rule doesn't apply. This means that you were required to pay 90% of your 2024 tax liability and can't avoid the penalty by paying 2023's liability. Form 5805 is calculating correctly.

Who Must Pay California Estimated Tax Payments