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Possible Underpayment Penalty

The screen for Illinois State Taxes called "Possible Underpayment Penalty" has an error reported the amount of tax liability.  This screen shows $1,718 but all other places the IL tax due is $718, which is the correct amount.

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Possible Underpayment Penalty

tax liability of 1718 would be line 24 of your return before any withholding or estimated tax payments 

the $718 would be after withholding and estimated tax payments line 32 of 1040

 

for Illinois purposes to avoid penalties your withholding and timely estimate tax payments must bee 100% of your 2022 tax or if lower

90% of the net of 2023 tax less withholding.

example

2022 tax $7000

2023 tax $6000 and withholding of $667 net $5333. 90% of $5333 is $4800 which is lower than the 2022 tax so $4800 is what is used. to avoid penalties 1/4 of this amount or $1200 needed to be paid in as timely quarterly estimates. you'll need to review the IL 2210 form. to see if you have penalties. they would be on line 22 of form IL-2210.   you have the option to pay penalties with the return or let Illinois send you a bill. if you elect to pay with the tax return the amount will appear on 1040 line 33

if you don't the penalties are not shown on the return and form Il--2210 is not included with the e-file. Illinois will send you a bill. 

 

 

 

 

 

 

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