I filed for an extension on April 15, 2025 and paid the estimated tax on the same date. The return is stilll showing a penalty and I don't know how to correct that.

[baldietax]

did you enter the April payment under Deductions & Credits / Other Income Taxes / Payment with 2024 Federal Extension

April/extension aside did you have a penalty due to underpayment in 2024, if you didn't withhold enough or pay timely (quarterly) estimated taxes to meet the safe harbor amount (smaller of, 100% of your 2023 tax [110% if AGI > 150k], or 90% of your 2024 tax)?  Paying it all by April does not avoid a penalty if you didn't pay enough thru the year - underpayment penalty is calculated on a quarterly basis thru the year.

If your income was uneven during 2024 and you had some sort of large income event late in the year such as Roth conversion or cap gains, you may be able to reduce the penalty by adopting the "Annualized Income" method on Form 2210, tho if you simply underpaid in 2024 it will not entirely eliminate it.

If you can provide more information on your situation based on the above then it will be easier to provide more guidance if needed.

[VolvoGirl]

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

If you have the desktop program you can switch to Forms Mode (click forms in the upper right (left for Mac)) and open the 2210 form.  If the 2210 doesn't show up in the left column, click on Open Forms at the top of the left column.  Type 2210 in the search box and open the 2210 form.  Check box C if you want to let the IRS calculate it.

[Mike9241]

an extension payment will not affect TurboTax's calculation of underpayment of estimated tax penalty.

this occurs when you owe more than $1000 and your withholding and timely estimated tax payments (an extension payment is not an estimated tax payment) don't equal or exceed a) 90% of your current year tax or b) 100% of last year's tax (110% if your prior year adjusted gross income is $150K or more).

the penalty is calculated using the lower of a or b.