state not recognizing payment of taxes with extension filing

[joehartline]

I filed an extension request on May17 along with payment of what I believed I was going to owe. I transferred $2072 to the state.  Two weeks later, in Turbo Tax I entered the $2072 as an estimated tax paid and filed my return with the state. The state send me a letter stating I owe $2072. They are not recognizing the payment even though it was received by the state. What should I do?

[rjs]

A payment with an extension is not an estimated tax payment. (The amount you paid with the extension might have been an estimate of what you owed, but the term "estimated tax" has a special meaning on a tax return. It means quarterly payments that were made during the year.) Depending on the state, there might be separate places on the tax return for estimated tax and a payment with an extension. So it might be that the state didn't recognize the payment with the extension because it's on the wrong line of your tax return.

Every state has different forms. What state did you file in? What state tax form did you file? Look at your copy of the state tax return that you filed. Does the $2,072 appear on the form? If so, what line is it on?

[joehartline]

Georgia. Line 25  Estimated Tax for 2020

[rjs]

Georgia Form 500 has one line, line 25, for both estimated tax and a payment with an extension. So your payment is on the correct line, and my initial guess about what the problem might be is wrong.

How did you make the payment? Did you mail a check with a Form IT-560 payment voucher? What do you mean by "I transferred $2072 to the state"? Where did you transfer it from? How did you transfer it? Where did you transfer it to? If you made a payment with your federal extension, that is only for federal tax. There is no way to apply part of it to state tax.

How do you know that the state received your $2,072 extension payment?

What exactly does the letter from the state say about the $2,072? Does it say why they are not crediting it towards your state tax?

[joehartline]

I filed an extension on the Georgia site and they have an option to make a payment if you owe tax. I opted to make a payment through ACH, so the money came out of my checking account. It went to the Georgia Dept of Revenue, Georgia Tax Center. I received a confirmation from the state and my checking account shows the withdrawal.  This is state only. I made a separate payment to the US IRS.

The state letter lists 22 line items from my return. One column lists my numbers. The second column shows the state's computations. All the numbers match except for Estimated Tax Paid where my return shows $2072 and their column shows $0.  The letter says for me to submit documentation that I have paid the estimated tax.

[rjs]

Based on what you have said, this seems like an obvious mistake by the Georgia DOR. It looks like you have to write back to them, telling them how and when you made the payment, and attach a copy of the confirmation that you received. I would also include a copy of the transaction in your bank account records. Follow the instructions in the letter for how to reply.

You probably don't need any help to reply to the letter. But if you want some help, and you purchased Audit Defense, call TaxAudit at 877-829-9695, or report the letter on the TaxAudit.com web site. They will help you with the letter, even though it's not actually an audit. If you did not purchase Audit Defense, you can get help with the letter from TurboTax at the following link. The screens talk about an IRS letter, but they will help you with a state letter also.

We can help you with your IRS letter