I unexpectedly received a large amount of income in 12/2021. I used Annualized Income Installment Method for my Federal tax to eliminate the underpayment penalty. It did not get transferred to my Massachusetts state Tax. How can I annualize income in MA state tax? I cannot find the section in my TurboTax Deluxe.
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It appears MA doesn't have a way to annualize your income like the federal return. However, MA has some exceptions that may apply to you. There is an exception if "My estimated payments and withholding for 2021 equal or exceed my 2020 tax (I filed a 2020 return for an entire year)". To get to that screen, see the steps below.
Thanks for your help. I cannot find the MA Underpayment Penalty screen. I finally went into Form M-2210 and checked off an Exception, and the penalty went away.
"It appears MA doesn't have a way to annualize your income like the federal return."
I don't think this is correct. Form M-2210 Part 3 has space to annualize your income.
Similar to 6yee, I just finished with Turbotax Home & Business 2022 and the step-by-step method didn't give me the option to annualize for MA, and none of my work annualizing my income on my federal return transferred over.
When I step through the MA interview in Home & Business, TurboTax tells me that I have an underpayment penalty of $50. On the same screen, TurboTax asks, "Do you wish to use the annualization method to figure out your tax penalty?" Answer Yes.
You should see the next screen of "Annualized Income", where you can enter the income amounts to test for the exception.
I am guessing that there is some arrangement of data causes TurboTax not to show you this screen, because it is certainly there.
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