Payments entered should appear in Deductions and Credits, Estimates and Other Taxes Paid, in the Federal return.
If you are In the California return and working on the Underpayment Penalty questionnaire:
In that case, you will see Underpayment Penalty listed as an item under Other Situations and you may also see a screen prompt before you get to the end of the California items asking if you want to go over the penalty section now. Respond "yes" to "Would you like to review this topic?". If yes, you are given the choice to let the Franchise Tax Board calculate the penalty and send you a bill, or to complete the questionnaire.
You can avoid the penalty if:
• The amount of your tax liability (not including tax on lump-sum distributions and accumulation distribution of trusts) less credits (including the withholding credit) but not including estimated tax payments for either 2023 or 2024 was less than $500 (or less than $250 if married/RDP filing a separate return).
• Your 2023 return was for a full 12 months (or would have been if you were required to file) and you did not have any tax liability on that return.
• The amount of your withholding plus your estimated tax payments, if paid in the required installments, is at least 90% of the tax shown on your 2024 return or 100% of the tax shown on your 2023 return (110% if California adjusted gross income (AGI) was more than $150,000 or $75,000 if married/RDP filing a separate return) and you are not using the annualized income installment method. Taxpayers with California AGI equal to or greater than $1,000,000 (or $500,000 if married/RDP filing a separate return) must use the tax shown on their 2024 tax return if they do not meet one of the two conditions above.
Complete the questionnaire rather than attempt to override the form. If your answers to the questionnaire result in eliminating the penalty, then Form 5805 won't be included with your return. If you otherwise are liable for the penalty, the FTB will calculate it.
See this FTB webpage for more information about California penalties.
If you are looking to determine whether the state tax refund you received in 2024 is taxable:
A state tax refund from filing the prior year's taxes would only be taxable to the extent there was a tax benefit - i.e., you took an itemized deduction for taxes paid.
If you are entering a state tax refund received in 2024 as income and reported on Form 1099-G, TurboTax will ask how much you deducted for state and local taxes in 2023 (line 5 from Schedule A).
For "total of all your payments and withholdings", enter payments for the state for which you received the refund. If you received refunds from more than one state, enter each one separately in TurboTax and report payments associated with that state. Use the link to Add another state or local tax refund.
Under the entry field, "Total of all your payments and withholding", a link appears, "What does this include?". The text at that link explains:
Add up any payments you made to your state or locality, along with any state or locality withholdings from the previous tax year (in this case, 2023), including:
- Amounts withheld on your W-2, W-2G, and 1099
- Estimated tax payments for 2023 (including any paid in 2024 for 2023 - it's common for the fourth quarterly payment to be made in January)
- Overpayment from 2022 applied toward your 2023 return
- Payments made with an extension of time to file
- Refundable credits
You can find most of this info on your 2023 state tax return. Do not include balance-due payments made with (or after) filing a return. Enter the total amount of all of these combined here.
See this help article for more information on entering the form.
See this article for more information about Form 1099-G.
See this TurboTax help article for more information about whether you need to report your state tax refund from last year as income.
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