Just finished my 2022 taxes with TurboTax Home & Business.
I had a $15 underpayment penalty on my federal return. I jumped through all the hoops to annualize my income and the penalty went away. (My rate was of dollars saved per amount of time spent was probably below minimum wage for my area, but whatever, it's the principle of the thing.)
Then I went through my Massachusetts return, and toward the end I noticed a $1 underpayment penalty. I was never prompted or offered to annualize my income for MA. I switched to Forms mode and found form M-2210, where Part 3 has space to annualize my income. Tried to switch back to step-by-step (hoping I'd see the step-by-step corollary of form M-2210) but it just put me back where I'd left off.
Since it was only $1 I didn't bother trying to figure out form M-2210, but I'm wondering:
1. Why did the MA step-by-step method not give me the option to annualize my income for MA? The $1 penalty was from Q1, so I'm pretty sure annualizing would have made the penalty disappear.
2. Why did none of my work annualizing my income on my federal return transfer over to my state return?
(User 6yee asked about what sounds like the same issue a year ago. This feels like the kind of problem sophisticated software like TurboTax shouldn't continue to have year after year.)
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"Why did none of my work annualizing my income on my federal return transfer over to my state return?"
The amounts on the 2210 are dollars on the federal return while the amounts on the M2210 are amounts on the MA return. There is no reason why they would be the same, even though they might be.
As for why you were not offered the annualization option, my guess is that your shortfall in MA tax must have to exceed some amount to trigger the annualization option.
For example, I see "You do not have to complete Form M-2210 if the balance due with your return is $400 or less." (page 19 of the Form 1 instructions).
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