How much of your 2020 estimated state taxes did you pay in 2021?

[avo]

can somebody please clarify what this question is asking for? what numbers are they looking for?

thanks.

[ErnieS0]

You can make state estimated tax payments at any time. However, your payments are divided into four quarters. The last quarter ended on January 15, 2021.

TurboTax wants to know whether you paid any estimated taxes for the 2020 tax year after January 1, 2021.

That amount gets credited to  your 2021 federal return because it was made in 2021.

[avo]

thanks so much for explaining what's required. that is very clear.

2 follow-up questions.

this is asking for state only, right, not federal?

is this a FYI for them only? regardless of the amount you paid in '21 for the 2020 estimated tax, the full amount paid for the 2020 estimated tax will be deducted from the tax owed. is this right?

thanks again!

[ErnieS0 · Accepted solution]

Yes. That is for state only. You can claim a deduction for state taxes paid for federal. You can't deduct federal taxes on federal.

It's not an FYI. TurboTax uses this info for your state tax deduction.

A January estimated tax payment will be applied against prior year tax. So a payment of 2020 estimated state tax in January will be deducted from 2020 state tax owed on the 2020 state tax return but will be a 2021 federal tax deduction.

YW!

[avo]

"A January estimated tax payment will be applied against prior year tax. So a payment of 2020 estimated state tax in January will be deducted from 2020 state tax owed on the 2020 state tax return but will be a 2021 federal tax deduction."

I didn't know that. Thanks!

Where do you make such deductions - only if you itemize deductions in Schedule A? If you don't itemize, guess you won't be able to deduct?

Also, how about the estimated payments for the other 3 quarters within the year of the 2021, can they be deducted from federal in 2021?

I'm just learning about state tax deduction, so this is fairly new to me. I appreciate your time in this!

Thank you!

[LenaH]

You would only be able to deduct your state income taxes paid if you itemize your deductions on Schedule A. If you take the standard deduction, you cannot deduct the taxes. In addition, the SALT (state and local tax) deduction is capped at $10,000. That means if the combined total of your state tax, real estate tax, and personal property tax amounts to $15,000, you can only deduct $10,000 maximum.

The estimated payments for the other three quarters within 2021 are deductible on your federal return (if you itemize). 

For more information, please see Can I deduct state or local income tax on my federal return?

@avo

[SobaNoodles22]

I just came across this now and there is a number automatically provided by TurboTax. Doesn't ring a bell for me. Should I trust this autofilled number? I have used TurboTax for years and don't recall this question. Thanks!

[JulieS]

Normally your fourth quarter estimated payment is paid on or before January 15 of the following year. If you paid your fourth quarter payment in January, this is probably correct. 

[SobaNoodles22]

Thanks, I didn't make quarterly payments in 2020 nor 2021. This is the first year, however, I can file a Schedule C as I have 1 1099 form from some freelance work in 2021 but it isn't for a large amount in order to do quarterly taxes. 

[cdogngeorge]

Should this amount also include the amount paid with the extension to file (also being in 2021)?

[Critter-3]

@cdogngeorge    NO ... a payment made with an extension is NOT the same as an estimated payment.  In the TT program this is entered in totally separate places... do not mix them up. 

To enter, edit or delete estimated taxes paid (Federal, State, Local) -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credits
• Click on I'll choose what I work on (if shown)
• Scroll down to Estimates and Other Taxes Paid
• On Estimates, click on the start or update button

Or enter estimates paid in the Search box located in the upper right of the online program screen. Click on Jump to estimates paid

To enter, change or delete a payment made with an extension request (Federal, State, Local) -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credits
• Click on I'll choose what I work on (if shown)
• Scroll down to Estimates and Other Taxes Paid
• On Income Taxes Paid, click on the start or update button

On the next screen select the type of extension payment made and click on the start or update button

Or enter federal extension payment in the Search box located in the upper right of the program screen. Click on Jump to federal extension payment

The federal extension payment will be shown on Schedule 3 Line 10. The amount from Schedule 3 Part II Line 15 flows to Form 1040 Line 31.

[cdogngeorge]

I realize they are entered in two different places and are treated separately, but this post is about a very specific Turbotax question:  "How much of your 2020 estimated state taxes did you pay in 2021?" which presumably is to determine if it should include it in the 2021 state tax deduction on Federal taxes.  Whether one pays $50 on Jan 15th estimated or April 15th extension, the treatment as a Federal tax deduction should be the same -- deducted in the tax year paid.

Regardless, I don't know why it wouldn't autofill the answer from the previous year's data instead of starting with "0".  It seems to carry over other amounts just fine.

[redz7yadhjjqy8jk]

Am I correct that if one pays his/her fourth quarter estimated tax payment early (i.e., before Jan 1), then this issue of claiming a deduction for state taxes does not apply?

[AnnetteB6]

Not necessarily.  The state estimated payments would still qualify to be deducted as a tax payment if you use Schedule A itemized deductions instead of the standard deduction.  If your fourth quarter payment was made before January 1st, then all four quarters of state estimated payments could be included as a deduction instead of only the first three quarters.  

@redz7yadhjjqy8jk 

[redz7yadhjjqy8jk]

Thank you Annette.  I'm not quite sure I understand.  If Turbotax asks me "How much of your 2021 estimated state taxes did you pay in 2022", and I paid the *sum* of all 4 quarterly estimated 2021 taxes in April 2021(and none in 2022), then I should put this entire sum in as the answer to the question, and not just the 4th quarter amount (i.e., one-fourth of the sum)?