Delaware Estimated Tax Required

[John19422]

I have been using TurboTax for years and have always been pleased with the ease of entering data and the level of detail the program provides for both Federal and State taxes.  However, today I received a notice from the Delaware Division of Revenue stating that I owe a penalty for "underpaying estimated income tax" on my 2022 Delaware state taxes.  

I have relied on TurboTax to help fulfill these requirements, similar to how the program provides estimated tax coupons for federal taxes.  However, this didn’t happen for Delaware.  I had no idea that estimated taxes were required until I conducted extensive research this evening.  It turns out that Delaware requires estimated tax payments if the tax due to the state exceeds $400 in a given year.  

Why didn’t TurboTax provide me with the necessary information to file quarterly estimated taxes and avoid these penalties?  I am likely to be exposed to additional fines?  

[KeshaH]

TurboTax will suggest estimated payments for the next year if the information in the current year return indicates you're likely to be required to make the estimated payments. 

For TurboTax to proactively suggest estimated payments for 2022, it would have used 2021 data. TurboTax makes assumptions that income and expenses will stay the same for the next tax year. If there was nothing in your 2021 return to indicate that you would need to make estimated payments in 2022, it would not have known to make that suggestion.

If you expect your income, deductions, or withholding to change from one year to the next, you can provide this information to TurboTax so that you can determine if you need to make estimated payments. This is in the Other Tax Situations section of TurboTax. You have to make sure that you indicate you'd like to review the estimated payment section and not skip it.

If the changes happen after you file your return, you can come back to TurboTax to provide updated information and get estimated payment vouchers, if necessary.

If you've been required to make estimated payments and haven't been making them, it's possible that you may receive additional bills from the state.