When will Indiana Schedule IT-2210A be available in TurboTax Deluxe 2024?

[RDC6]

When will Indiana Schedule IT-2210A (Annualized Income Schedule for the Underpayment of Estimated Tax by Individuals) be available in TurboTax Deluxe 2024?  We are now almost one month away from this year's tax filing deadline.

For Indiana state tax filers, TurboTax Deluxe should complete Schedule IT-2210A to determine if estimated quarterly taxes were correctly paid if the filer's income was not earned evenly throughout the year.  Nowhere did TurboTax Deluxe give me the option to declare that my income was unevenly earned, and to then “annualize” my income.  Line 20.a. on Indiana Form IT-40 provides the option to enter an “A” to indicate that the taxpayer elects to annualize, which should then automatically trigger use of Schedule IT-2210A.  Instead, TurboTax Deluxe automatically prepares Schedule IT-2210 (to be used only when income is evenly earned).

When I look in the "Forms" view in TurboTax Deluxe, under "Indiana Individual" in the left-hand side panel, Schedule IT-2201A doesn't even exist.  This needs to be corrected very soon.

[CatinaT1]

This form is not supported for efile, but should be in the software. Be sure you have the most up to date version. You may need to do a manual update. 

What is a manual update?

[RDC6]

Thanks for your reply to my question.  This morning, March 26th, I manually downloaded and installed all the  updates to TurboTax Deluxe (TTD) 2024.  I then went back through the Indiana section of the software, and selected the option to "print" my state return for filing.  The Schedule IT-2210A did not print (in the .pdf version) of the return.  I then looked in the "Indiana Individual" panel under the "Forms" view, and it is not there either.  In fact, TTD didn't even print the regular Schedule IT-2210.

TTD also did not give me the option to "annualize" my income.  Following the update I went back into the Federal section to confirm my entries for my Indiana estimated tax payments (for some reason, state estimated tax payments are in the federal section), but that didn't make any difference.

Indiana requires that Schedule IT-2210A (or IT-2210, if income is evenly earned) be filed with a person's state income tax return.  At this point I will apparently need to download this form from the state's website, manually complete it, and then also manually place the letter "A" (to indicate that I am annualizing my income) in box 20.a. on Form IT-40.

I went through this frustration with TurboTax last year, and it took too long to get it corrected then.  So, it's really disappointing to experience it again this year.  How are we supposed to trust the claims of "100% accuracy" and the "largest refund" when we see obvious issues with the software?

[BillM223]

We need to explore this some. 

You said "TTD also did not give me the option to "annualize" my income." Quite the contrary, it does in TTD.

I can create the IT-2210A with the desktop software. I can see the same input screen in the Online software, so I assume that it creates the IT-2210A.

So are you saying that TurboTax reported that you had an underpayment penalty, but you never saw this screen? It's the same screen in Online and CD/download.

[RDC6]

Hi Bill,

At no point during my use of TTD did it ever ask me if I received income unevenly throughout the year.  Just now I went back and worked through all of the income screens, and at no point did it display the Seasonal Income screen that you included in your reply.

Should that screen appear in the federal or state section, and at what point?

TTD did not state that I owe an underpayment penalty.  But since my income is "seasonal", since I completed Roth conversions in 2024, I need to show in my Indiana return that my income was indeed seasonal, that my estimated tax payments were sufficient, and that no penalty is owed.  Hence, my interest in the Schedule IT-2210A, which is a required enclosure.  I also need to enter an "A" into block 20.a. on the Form IT-40 to indicate that I am annualizing my income.

If you can show me how to prompt TTD to do this, I'd much appreciate it.  I would have expected that when TTD recognized I was doing Roth conversions, it would have automatically asked.  Thanks!

[BillM223]

For whatever reason, TurboTax determined that you did not owe an underpayment penalty for Indiana even without the annualization of income. In this case, TurboTax will not show you the screen for Seasonal Income, because there is no reason to file IT-2210 or IT-2210A if you have no underpayment penalty.

For example, if the amount of assessed state tax less withholding and estimated tax payments is less than $1,000, then you won't owe underpayment of tax penalties. This situation causes TurboTax to skip the entire underpayment of tax processing.

Alternatively if the amount of tax withheld and paid as estimated tax is equal to 100% of last year's tax (110% if last year's federal AGI is more than $150,000), then, again, there is no underpayment of tax penalty, and the processing is skipped.

Do either of these situations seems likely in your case?

[RDC6]

Hi Bill,

We're certainly in agreement about the rules for avoiding a tax penalty.  So, for 2024, the total of one's credits (the sum of withholding and estimated tax payments), must be at least 1) 90% of 2024’s tax due or 2) 100% of 2023’s tax owed (110% if one's federal AGI is more than $150,000 if married filing jointly).  However, unlike federal rules, where total credits can be spread evenly across the four quarters of the year, this requirement, in Indiana, must be met on a "per period" basis.  That is, the amount of total tax credits each "period" must be sufficient for the amount of income earned in each of those same periods.  So, for example, if a taxpayer underpays estimated taxes in the first period (Jan - Mar), that cannot be offset by overpaying in the second period (Jan - May), and a penalty would be assessed.

The total of my 2024 Indiana tax credits is more than 90% of my 2024 tax owed, but less than 100% of my total 2023 tax owed and paid.  I also still owe more than $1,000 for 2024.  So, I don't escape a penalty based on either of these two exceptions.

That's what's puzzling me at the moment.  While TTD did ask me to enter the amount of each of my estimated Indiana tax payments per period, and the date on which I paid them, it never did ask me to enter my income for each of these same periods.  Without that data, I don't know how TTD could determine that each of my estimated tax payments was sufficient for the income earned in that same period.

All that said, I do track my income and tax credits closely enough using an Excel model that I know I do not owe a tax penalty for 2024.  TTD did not indicate that I do owe a penalty, and I did not expect it to do so.  I just don't understand how TTD could have drawn that conclusion by not knowing my "per period" income, and then running through the appropriate IT-2210 schedule (by asking whether or not I wanted to annualize my income).

Does this make sense?  Am I missing something here?

Thanks again!

[BillM223]

Did you get this screen in TurboTax:

I am wondering if we should look at the words carefully. You apparently do not have an underpayment penalty.

But why not? What is your tax due? What is your withholding? What are your estimated payments? And what are the credits on lines 12 and 13 on the IT-40? Is it possible you have credits that smothered the tax due?

[RDC6]

Hi Bill,

You're correct; I do not owe an underpayment penalty to Indiana, and TTD did not state that I do.  Between my withholding and my timely "quarterly" estimated tax payments, I paid 92% of my 2024 state taxes due.  I will pay the balance when I file my state return.

The large majority of that 92% was paid in the form of estimated taxes.  In fact, about 84% of my tax payments during 2024 resulted from estimated tax payments.  This is because I am a retiree and completed Roth IRA conversions in 2024.  I had identical monthly pension amounts and two large Roth conversions, one in Q1 and the other in Q4.

Consequently, my income was very unevenly earned throughout the year.  All of my income was entered into TTD as annual amounts.  TTD also knows my total withholding amount, and the amounts and timing of my four estimated tax payments.

As I mentioned previously, Indiana is a "pay as you go" state, meaning that tax payments must be made on a "per period" basis, such that they adequately match the income earned in each of those same tax periods.  So, if a person's income is largely earned in Q1, that person cannot wait to pay their minimum 90% until Q4.  They would be assessed underpayment penalties for Q1, Q2, and Q3.

That's the point of Indiana Schedule IT-2210A.  When income is unevenly earned, did you pay adequate taxes in each period to match the income earned in each of those same periods, regardless of whether or not you met the minimum 90% threshold for that year?

And this is where I don't understand how TTD "thinks".  Based on the information it has asked for, and that I have entered, it doesn't know how much income I earned in each of the tax "periods" in 2024.  Also, completing Sections I and II of Schedule IT-2210A shows that I need to complete the remainder of the schedule to see whether or not I do owe a penalty.

So, that's where this all stands.  I do appreciate your interest and responsiveness to my concerns, but at this point I think I'll just manually complete the IT-2210A myself.  I do think, however, that this matter needs to be followed through at some point.

Thanks again!