Deceased Taxpayer Incurring Penalty on Estimated Tax Payment Due After Death

[Zebra Stripe]

I am filing a tax return for a taxpayer who died in November 2022, before her fourth quarter estimated tax payment was due in January 2023.  It is my  understanding that no estimated payments are due after death (IRS Reg 1.6015(b)-(1(c)(2) and Private Letter Ruling 9102010), but TurboTax is showing a small penalty for not filing the fourth quarter payment.  I have attached Form 2210 and requested a waiver of the penalty. TurboTax knows the taxpayer is deceased because I have entered the date of death and it appears on her Form 1040. Is there a way to enter further information in TurboTax to avoid having the penalty generated on her tax return and thereby avoid the need to file Form 2210?

[tagteam · Accepted solution]

See https://www.thetaxadviser.com/newsletters/2016/jan/taking-control-of-final-form-1040.html

The article provides a good explanation of the current state of affairs.

The decedent's tax year ends on the date of death so only the income for that period is taken into consideration and the estimated payments for that period should cover any tax liability. 

[JulieS · Accepted solution]

Yes, you can request a penalty waiver in TurboTax. This is how you do that:

1. Open the return and select Federal from the left side menu.
2. Select Other Tax Situations on the left.
3. Scroll down and look for Additional Tax Payments, expand the section.
4. Click Start or Revisit to the right of Underpayment Penalties.
5. Continue until you get the screen Penalty Waivers, answer Yes.
6. Answer Yes on the next screen.
7. Select Waive all.
8. Enter a brief explanation including the date of death. 
9. Form 2210 will be attached to the return with a penalty waiver statement and the penalty will be removed from the return. 
    

[Zebra Stripe]

Thank you for the link to the article.

[Zebra Stripe]

Thank you for the helpful instructions.  I will file Form 2210 to ask for a penalty waiver.