estimated tax penalty and self employment tax deferral

[Lindy]

I noticed that my estimated tax penalty is HIGHER if I don't take the self employment tax deferral.

That doesn't seem right to me?  If I pay the self employment taxes in full by April 15, my penalty is higher than if I defer them to December 15?

Is this a turbo tax error?

[Mike9241]

if you don't take the deferral your taxes due 4/15/2021 are higher and there follows that your penalty will be higher. 

[rjs]

Well, it might make sense. I'm just thinking about it theoretically, without getting into the details of the calculations. This is just my own thought, not anything official. It's sort of an expanded explanation of what Mike9241 said.

The estimated tax penalty is for not having paid enough during the year - essentially for paying too late. Technically, what the deferral of part of the self-employment tax does is actually extend the due date for that part of the tax. If you don't take the option to defer it, the due dates for the quarterly estimated tax payments remain the same, and paying by April 15 is already paying late. But if you take the option to defer part of the tax, as long as you pay it by December you are now paying it on time, not late. So that would reduce the penalty for paying late.

[Lindy]

Sigh.  I suppose that makes sense in a weird IRS sort of way.  Thanks for responding, both of you. 

I haven't found much info on how to pay the deferred self employment tax when the time comes.  Will it be designated on the EFTPS website, do you know?