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Returning Member
posted Jul 28, 2021 9:18:55 AM

Moving from MD to PA

In the last week of March 2021, I filled out the necessary paperwork for the State of MD retirement & pension to stop taking state taxes of my disability retirement check starting the end of April 2021.  Before moving to York, PA, I contacted the Revenue department of PA.  They told me that they do not tax alimony & child support.  Also, I told that I would be required to pay estimated state taxes on my disability retirement checks.  State taxes for PA for estimated payments are required quarterly on April 15th, June 15th, Sept. 15th, & January 15th.  Since the percentage for the taxes is 3.07%, my quarterly payments would be ($93.00 x 3=$279.00).  I was told I should receive something from MD (January to April 14th) & something from PA (April 15th to the end of December 2021).  What forms would I receive in order to file my taxes in both states?

From June 15th, my estimated taxes here in PA, I paid late that was posted to my bank account on July 12, 2021.  How would I know what to pay as far as penalty fees on my 2021 taxes?

 

 

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1 Replies
Expert Alumni
Jul 28, 2021 9:56:15 AM

Hello, thank you for contacting TurboTax.

 

 You should receive a 1099-R from both the state of Maryland and the state of Pennsylvania. You are wise to be making estimated tax payments. You should receive each statement in January of 2022. The 1099-R from Maryland should only cover January through April of 2021. The 1099-R from Pennsylvania should cover May through December of 2021.

 

https://sra.maryland.gov/sites/main/files/file-attachments/retireenewsjan2021_-_final.pdf?1610142338

 

You should not be assessed a late penalty. The IRS has a "pay as you go" system, which means you're supposed to pay taxes throughout the year as you earn or receive income, rather than sending a big lump sum to the IRS at the end of the year. If you are late with any given estimated, you may be subject to a penalty for that particular quarter. However, the IRS offers two "safe harbor" methods for determining whether you are subject to a penalty. If you meet one of these safe harbor amounts, the IRS won't charge an estimated tax penalty, even if you owe more than $1,000 at the end of the year.

The requirements are that you pay:

  • 90% of the tax you owe for the current year. Estimate what you'll owe and pay at least 90% of this amount in four equal installments or through paycheck withholding.
  • 100% (or 110%) of last year's tax bill. Pay 100% of the tax shown on your prior-year tax return before applying estimated payments, withholding, or refundable tax credits. If your adjusted gross income is more than $150,000 (or $75,000 if you're married and file a separate return from your spouse), the safe harbor is 110% of your prior-year tax.

Therefore, you will not be assessed a penalty if you meet either of the safe harbor methods above. 

 

https://turbotax.intuit.com/tax-tips/irs-letters-and-notices/guide-to-irs-tax-penalties-how-to-avoid-or-reduce-them/L7Unetw5B