Kevinandlori, thanks for your extensive analysis. My comment relates only to your item 4. Based on my own experience with the 2021 Form 2210, TT's Line 11(a) calculation of first quarter estimated tax includes the amount of the 2020 tax overpayment applied to 2021, but generally reduces the Line 11(a) amount by any tax paid with the 2020 Form 4868 extension of time to file the 2020 return, which was due May 17, 2021. [Note: I indicated in an earlier post that I thought this was a programming error, but it is not.]
TT assumes that tax paid with the extension was paid on May 17, 2021, unless the customer indicates on the applicable TT input sheet that it was paid on another date. For example, if a 2020 tax overpayment of $500 was applied to 2021, and $300 was paid with a timely-filed 2020 Form 4868 after April 15, 2021, TT is reducing the $500 first quarter estimated payment included on Line 11(a) by the $300 extension payment, unless the customer indicates that the Form 4868 amount was paid on another date that is on or before April 15, 2021. In the example above, TT is applying the $500 overpayment as a 2021 estimated payment as follows: Line 11(a) $200 that is treated as paid on April 15, 2021; Line 11(b) $300 that is treated as paid on May 17, 2021.
In an earlier post made last week, I did not realize that TT is including the $300 Form 4868 tax payment in this example as a second quarter estimated payment on Line 11(b). A careful reading of the 2021 Form 2210 Instructions for Line 11 provides ample support for TT's conclusion. See second bullet in the penultimate paragraph of the guidance for Line 11 on page 5 of the Instructions, which states: "If an an overpayment is generated on your 2020 return from a payment made after April 15, 2021, treat the payment as made on the date of payment." Moreover. the IRS has consistently taken this position during 2021 and to date in 2022, most notably in an announcement made April 12, 2021. IRS created this dilemma when in March 2021 it decided to postpone the 2020 tax return filing date to May 17, 2021, but did not likewise postpone the April 15, 2021 due date of the 2021 first quarter estimated tax payment.
Just to be clear, I checked Box D in Part II, electing to treat federal income tax withheld from 2021 income as paid on dates actually withheld for Form 2210 purposes, rather than spread the aggregate of 2021 withholding tax equally over the four 2021 estimated tax installment periods. While I did not elect to use the annualized income installment method (Part II, Box C), the Line 11(a) issuue descibed above is applicable to any taxpayer who is required to file Form 2210 because it checked either Box C or D in Part II of the Form.
