Estimated tax calculation insists on using last year's W2 withholding for this year

[user17735323828]

I'm using TurboTax Premium Online.

I enter "Federal" -> "Other tax situations" -> "Other tax situations summary" -> "Form W4 and Estimated Taxes" -> "Estimates", where I fill out my expectation for this year's income, withholding, etc., making sure that the question "Copy current year wage information to next year" is answered with "*No*". For this year's W-2, the "Expected federal tax withholding" amount I enter is much smaller than last year's. At the end of this entry flow, the TurboTax estimate for "2026 taxable income" and "2026 tax" seem correct. On that screen, for estimated tax payment calculation method I select "100% of tax on your estimated 2026 estimated taxable income". On the next screen, TurboTax declares "Based on your entries, you have no estimated tax payment liability", which is bogus because the entered estimated withheld taxes for 2026 do not cover the estimate for the "2026 tax" by far.

If I use the estimated tax payment calculation method "100% (110%) of your actual 2025 taxes" instead, I do get estimated tax payments, but the amounts are significantly too low.

When I then go to "Tax Tools" -> "Print Center" and print the "2025 Federal return" -> "Include government and TurboTax worksheets", I can see the worksheet "Amount of Estimated Taxes to Pay in 2026" contains the line "Expected withholding for 2026" filled in with "(*2025 actual withholding*)" followed by last year's amount. This is where the TurboTax calculation error comes from: It ignores the information I entered for expected 2026 W2 withholding and instead uses last year's numbers, which I explicitly told it not to use.

How do I fix this?

[DianeW777]

It depends. This is not something that I have seen identified earlier. To be sure there is no background debris, I would first suggest to remove your information for the 2026 estimated tax and then follow the steps below after your close your return..

Try clearing the cookies and cache because handles many issues that seem nonsensical on a regular basis with online activity. Watch to be sure you are selecting 'all time' as example.  Do not use selections like 'last hour' for those browsers that give  you options.

• How to clear your cache

Once this is complete open your return and try again.

If you should experience the same result, you can print the Forms 1040-ES and enter the number you believe you should pay each quarter based on the information you know that will change.  If you want you can print forms for your use.  IRS Form 1040-ES 2026

[user17735323828]

DianeW777,

There isn't really a way to "remove the information for the 2026 estimated tax". The only option that TT gives me when I "Revisit"  "Form W4 and Estimated Taxes" is a toggle to choose between "W-4" and "Estimates". I can't select none.

That said, for test purposes I've switched it to "W-4" and in that flow I've removed my estimated W-2 earnings for 2026, finished the flow, and logged out. I've then logged back in on a different browser that I've never used before for TT (so it can't have any cookies or other saved information for TT), switched back to "Estimates", and added estimated W-2 earnings for 2026 again. In the end I get the exact same result as before, where it's using the 2025 W-2 for 2026 estimated taxes, instead of using the W-2 estimates for 2026 that I provided.

Of course I could just fill out a freshly printed form 1040-ES from the IRS with my own numbers, but the point was to cajole TT to actually use the right information to get it to compute the right numbers for the 1040-ES it prints.

[DianeW777]

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

We will be able to see exactly what you are seeing and we can determine what exactly is going on in your return to provide you with a resolution.

@user17735323828 

[user17735323828]

@DianeW777, here is the information: WA, 1346082

[DianeW777]

As I review your tax return I see that the 2025 actual withholding is being used instead of your estimated 2026 withholding entered to determine the estimated tax payments. After some research here is what I began to see as the reasons.

In both TurboTax Online and TurboTax Desktop for a given tax year (TY 2025 currently):

• The “2026 estimated tax” calculations live in the 2025 product and are based primarily on your 2025 tax, credits, and withholding.
• When the interview asks for 2026 expected withholding, income, etc., those inputs are:
  • Used in certain what‑if (e.g., suggested quarterly payment amounts), But the core worksheet logic still typically anchors to 2025 tax liability and 2025 withholding as the baseline.

The estimated‑tax module is designed around the IRS safe‑harbor rules and typical workflows. Since it is a prediction and the 2025 tax year is the base for the basic workflow, it appears the 2026 information is not moving into the actual flow to the estimated tax forms. Although it does help you to know what amount you should consider in paying for estimated quarterly payments. In your situation, you are going in a reduced income situation which is not being accounted for. 

For this reason you will need to make the adjustments on your actual payments using what you know will be the case for your reduced income. I will request a possible change, and then demand will likely dictate the results.

@user17735323828 

[marybkacz]

Hello,  DianeW777, 

I read this conversation since I am having the exact same issue with TT defaulting to my 2025 withholding amounts, which were higher in 2025 than they will be this year. I tried changing them on the forms but it won't update. Turbotax even asked me in the interview what my expected withholding amounts would be, so why wouldn't it use the values I entered? If I followed TT's suggestions, I would significantly underpay my estimates and likely face a fine from the IRS. 

Please do request a change on this, since this issue  would apply to a lot of people - like me who retired at the end of 2025! 

[lostbutok]

I have the same problem. Turbotax needs to fix it. Not everyone has the same wihtholding every year. Funny, I adjust it in the state estimate but not the federal.

[rbtnich]

I too am having this exact problem with TurboTax premier 2025 desktop. I know exactly what my 2026 withholding will be (it will be a percentage of my IRA RMD), but no matter what I do TT insists on using my actual 2025 withholding when calculating my 2026 estimated taxes. I even tried creating a fictitious W-2 in that dialog (I am retired and have no actual W-2), and it was totally ignored.

This problem is new to TT 2025. I have never had this problem in previous years.

[user17759903134]

I experienced the same problem. Retired last year but had a small amount of earned income that wasn't paid to me until early this year. I entered the tax withheld from that amount for 2026 but TT is using the much higher withholding from 2025. So I'll just ignore the estimated payment amounts it generated, as they are obviously far short of the mark. Appreciate seeing prior user comments that confirm this glitch.

[alang611]

So I take it no change was ever made? I am having the same issue

[IsabellaG]

This issue is scheduled to be fixed. Check back after 4/24 to recalculate your estimated tax payments for 2026.