2021 Form 2210 Calculation Error

[sandy4042]

I haven't been following this thread except addressing my latest questions these past couple days but it looks like Form 2210 has had problems, unlike most of Turbotax, which is excellent.  I'm puzzled why Line 11 not including overpayment from last year still hasn't been fixed.  It seems obvious that columns a) - d) should add up to be the total amount of tax you paid toward your tax liability, i.e.,  it should match 1040, line 33.  At least it did on my last year's 2210 (TY2020).  Because it didn't, the detail of 2210 showed underpayment, but (???) didn't calculate the penalty.  It's like the second error cancelled out the first error.

[MJK6]

Another weekly update.  Still no fix for 2020 refunds applied to line 11, and no fix to the form 2210AI line 14 tax computation. 

[sandy4042]

Reading through this thread, there is a poster who has repeatedly said that Line 11 col a,  not including 2020 overpayment is correct.  Something about you should have filed Form 4868 for it to be credited for 4/15/21 (But I filed on time without an extension, I never filed a Form 4868).  Nonetheless, the fact that Turbotax has not fixed what most consider a bug, does this give credence to this user's interpretation?  I read the instructions for line 11 for Form 2210 and it says "generally, consider 2020 overpayment applied to 2021 as paid on April 15th".  I haven't tried selecting Box D), the poster's other suggestion,  i.e., treating your withholding as paid on the dates withheld instead of equal amounts, because I didn't think it applied to my overpayment, and besides the program is not crediting my overpayment at all, on any column of line 11, it's not divvying it up into equal amounts.

[RRArtie]

@sandy4042  You say " the program is not crediting my overpayment at all, on any column of line 11, it's not divvying it up into equal amounts". The fourth column should match what you put in for the whole year and the numbers on the 1040 proper. Is you overpayment accounted for in the first part of the TT data?  Most people have commented that the fourth column has the same calculation results as the full year calculation outside the 2210. 

I think the point of checking Box D was to allow entering the withholding in the quarter that you received it and maybe reduce any first quarter penalty caused by the TT leaving out the overpayment.  For the purposes of this 2210 error discussion you could adjust the withholding to correct for the lost 2020 overpayment.  In other words, increase the withholding by the amount of overpayment not credited in the first quarter in column 1 of 2210. I think this is a work around to the lost underpayment and it only works to the extent you have withholding greater than the overpayment. 

As with any of these workarounds, keep good notes and possibly a correct 2210 calculation outside of TT for audit purposes.

[Scooby19]

What really triggers my ire about TT is that due to a programming error on the 2210 I was charged for an underpayment and now TT doesn't even have Form 843 to request the IRS to return the error.

[sandy4042]

To be clear, I was talking about Line 11 on Form 2210.  Columns a) - d) are headed by the Payment Due Dates of 4/15, 6/15, 9/15 and 1/15.  They should individually represent what you paid on or before each due date, not including any of the previous columns.  The sum of these columns should equal Line 33 on Form 1040. There's no overlapping time period for annualization going on as in Schedule AI, which determines the required installments for 4/15, 6/15, 9/15 and 1/15, which appear on Line 10 of Form 2210.  It's the comparison of Line 10 with Line 11 for columns a) - d)  on Form 2210 which determines underpayment.  I found last year's  Line 11 done correctly, i.e.,  columns a) - d) added up to my total payments, there is no column on Line 11 that shows your total payments.

The withholding that comes  from my W-2 does not specify the date it was withheld (which was even throughout the year in this case).   But I think I did what you are suggesting five years ago on a Form 2210 (checking Box D) because it did reflect a real situation at the time.  Spouse worked 1st three months of the year and not the rest.  It must have been a drop down box that let me specify the dates for the withholding and the amounts.  I suppose TT is not allowing an override of Line 11 col a) to include the 2020 overpayment?  It seems that would be preferred, since that would directly address the problem.  I haven't tried it, since as is, TT is failing to calculate the penalty even though (without the 2020 credit) it finds an underpayment in tax payments.

[sandy4042]

@RRArtie, I forgot to add in answer to your question, no, my 2020 overpayment is not showing up in any of the columns of line 11.

[sandy4042]

@Scooby19

I guess your only recourse is to file an amended 1040, if you already filed with TT's programming error?  For my state return which mirrors the Federal 2210 form, they got it correct....2020 overpayment is not overlooked.

[KCN]

TT needs to make box 11 on form 2210 editable so you can correctly put the value of your over payment from 2020 in this box.  The best workaround I've found is to delete the over payment amount specified for the year and put the amount in as an estimated tax payment for the first period.  By doing this, my line 26 of 1040 correctly shows the total amount of estimated payments and over payment from 2020.   I edited the explanation for line 26 to say that the over payment in 2020 shown as an estimated payment was due to a TT bug.   Hopefully this will help if the IRS complains that my tax payments worksheet incorrectly shows the amount as an estimated first period payment instead of an over payment from the previous year.   Right now there is no way to accurate submit my taxes using TT.   Either TT fixes the bug or my return will have to be submitted inaccurately. 

[sandy4042]

@KCN 

That's an interesting work-around, and is close to the truth....the overpayment can be interpreted as an estimated tax payment.  How do you get an opportunity in TT to provide a note for Line 26 on the 1040 to explain what you have done?  Is it in forms mode?

[KCN]

Yes, in forms mode, click on the "explain" button on line 26 form 1040.   It will bring up an "explanation statement".   I entered a description "$XXX overpayment in 2020. TT bug".   I'm just using this form to document the reason my 2020 overpayment is recorded as an estimated payment.   Don't try inputting anything in the "former name" field or it will give you an error.  

I'm a little concerned about filing this way because in the step by step mode TT specifically says not to include any 2020 overpayment in the estimated taxes.  If the IRS looks at the Tax Payments Worksheet which results from making this change, it will incorrectly show an estimated payment made in the first period.  I made no "estimated payments" during the first period.  But declaring my overpayment an estimated payment while reducing my overpayment amount to zero produces a comparable result.   Whether I get audited is another question.

TT needs to either use the overpayment you specify in the "other income taxes" section where you specify the amount of refund from 2020 to apply to 2021, or it needs to at least allow you to edit line 11 on 2210 to include this overpayment amount as the IRS instructions dictate for this line.   Otherwise nothing we do is going to be accurate.   

Does anyone working on TT bugs ever read these forums?   I tried calling them but was unable to talk to anyone since I'm not paying for support.   I don't need support.   But I would like their software to work correctly.  

[wmpyoungx]

Sandy4042, here is a suggestion that may work. [I am using the Deluxe CD version.]

If you filed 2020 timely on or before May 17, 2021 and did not timely request a Form 4868 extension which included a 2020 tax payment made after April 15, 2021, any 2020 overpayment that you directed be applied to 2021 should be included as part of the amount in Line 11, col. a. 

If you did not select Box D (or C or E), TT may be ignoring Form 2210, Part III (Penalty Computation). You may need to return to Other Tax Situations/Additional Tax Payments/Underpayment Penalties and review information you previously inputted. Check 'yes' for Tax Withholding by Quarter and input actual 2021 withholding. [Remember: even if withholding tax was the same for each pay period throughout the year, tax amounts withheld from 1/1 through 4/15 are usually greater than the other quaters because the first quarter contains 105 days. This is especially true if you are paid weekly.]

When you finish this step-by-step input, go to Forms/Tax Payments and review the Tax Payments Worksheet to see if TT tax payments agree with yours.  Line 6 of this Worksheet should include the 2020 overpayment that was applied to 2021. If incorrect, right click the appropriate Line 6 box and see if you can 'override' with the correct amount. The amount in line 6 (Federal) is a 2021 estimated tax payment that, based on information you provided in earlier posts, should be part of the amount in Line 11a of Form 2210, along with any other 2021 actual estimated tax and withholding payments made from January 1 through April 15, 2021.

Then review Forms/Form 2210, Line 11 amounts to see if they coincide with the Tax Payments Worksheet. 

Hope this works.

[KCN]

What you're describing is exactly the BUG in Turbo Tax:  "The amount in line 6 (Federal) is a 2021 estimated tax payment that, based on information you provided in earlier posts, should be part of the amount in Line 11a of Form 2210"   My Tax Worksheet has an amount - the overpayment amount - on line 6 on the Tax Payments Worksheet.   This amount is NOT used in TT for Form 2210.   Instead, TT is showing 0 for the amount on Line 11a of Form 2210.   

[sandy4042]

Thanks for your reply, @wmpyoungx.  I think my overpayment from 2020 is in all the correct fields with the one exception of Form 2210, line 11, col a).  It carried over from my 2020 return prepared by TT, which knows that I applied it to 2021.  I also filed by April 15th, didn't use the one-time extended date of May 17th.  This correct amount does show on my Tax Payments Worksheet on line 6.  It is also included in Line 26 of the 1040 ("2021 estimated tax payments and amount applied from 2020 return").   I did check Box C on Form 2210 for "use annualized income installment method" which triggered Schedule AI to be filled out.  I did not check Box D, "figure federal withholding as paid on the dates withheld, instead of equal amounts on the payment due dates".  What I see in line 11 col a) - d) are my estimated tax payments for each of the four payment dates plus, for each, my withholding divided by 4.  But no 2020 overpayment applied in any of the columns.

Then in Part III Penalty Computation of Schedule 2210, an underpayment is calculated for the first two payment dates due to the 2020 overpayment not being applied.  But curiously, Line 19 Penalty, shows zero.  So I don't have to do any overrides but am cautiously waiting to see if when I file, the IRS will reject the return, auto flagging as it were for no penalty shown.

[sandy4042]

@KCN It is frustrating.  I've got a case where because the O/P is not included in line 11 a), TT calculates an underpayment for the first two quarters.  But then it doesn't follow through and calculate the penalty, Line 19 shows zero.  I could simply e-file as is, because that's the result I want (zero penalty), but I'm wary that IRS might automatically flag and reject it, in that first 24 hours when you receive that cheerful TT email "Good news, your tax return has been accepted" instead it will be bad news. Then what do I do, try the work-arounds?

Worse comes to worse, I will just mail the return with the Form 2210 problem fields whited out and corrected.  Should be only line 11a) and 12-16.  I don't owe any taxes and am applying all of my 2021 overpayment to 2022.  Hopefully, the problem will be fixed for next year.