Yes, you will owe a late-payment penalty for underpayment of estimated tax if you were required to make estimated payments and failed to do so, or failed to pay the required amount by the payment due date. You may be penalized even if you are receiving a refund. If your Illinois Income Tax exceeds the total tax withheld and credits by more than $1,000 you may have been required to make estimated payments. The late-payment penalty amount is based on the number of days the payment is late. Payments less than 31 days late are penalized at 2% of the amount due and payments 31+ days late are penalized at 10% of the amount due.
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Thank you for the prompt reply. I did not receive any notice that I was withholding too little, or I was required to make estimated payments, or to pay a required amount by a certain date. When I did my 2020 returns, Step 10 of my Illinois return (Underpayment of Estimated Tax Penalty) was blank. Does this mean there is no penalty and I just need to pay the underpaid amount?
If you have a balance due, it isn't necessary mean you have to pay underpayment penalties. However, you stated that your underpayment for Illinois is about $5,000. In that case there should be penalties.