CA Form 5805 miscalculating penalty (2024)

[TooTaxedPerson]

For CA state tax, Form 5805, Part II, calculates "Required Annual Payment". Line 5 in this part is calculating incorrectly. It is supposed to calculate 110% of last year's CA tax. Instead it calculates 90% of current year CA tax, which is incorrect. The 90% of current year CA tax is only for line 2, not for line 5. Due to this miscalculation, the form ends up adding a $495 "FTB 5805" CA tax underpayment penalty for me. I should not have to pay any CA underpayment penalty, since I already made an estimated CA tax payment of more than 110% of last year's CA tax.

Can you please fix this bug . Thank you!

[snowtwin59]

I'm running into the same problem as the original post person. Please fix the bug Turbotax.

[marilynsanta]

Same for me.  Did you get this resolved?

Thanks

[snowtwin59]

No. I just went to the form and overwrite with the correct amount.

[koalawjy]

Hit the same bug. I believe you can choose to let FTB calculate the penalty to work around this bug. If FTB happens to miscalculate the same way (very unlikely, of course), you can always write a letter to argue back. 

[OCSeahawk]

I ran into same bug and was going to manually override like you suggested but upon researching further and checking 

https://www.ftb.ca.gov/forms/2024/2024-5805-instructions.html 

If the California AGI on your 2024 tax return is equal to or greater than $1,000,000/$500,000 if married/RDP filing separately, enter 90% (.90) of the tax liability from your 2024 tax return on line 5.

So you may want to check if that applies to you and the reason TurboTax is not entering 110% of 2023 and instead entering in 90% of 2024 on line 5.

[MonikaK1]

In the California return, the Underpayment Penalty questionnaire may not appear unless TurboTax has tentatively calculated a penalty based on the income and payment information you entered. 

In that case, you will see Underpayment Penalty listed as an item under Other Situations and you may also see a screen prompt before you get to the end of the California items asking if you want to go over the penalty section now. Respond "yes" to "Would you like to review this topic?". If yes, you are given the choice to let the Franchise Tax Board calculate the penalty and send you a bill, or to complete the questionnaire.

You can avoid the penalty if:

 • The amount of your tax liability (not including tax on lump-sum distributions and accumulation distribution of trusts) less credits (including the withholding credit) but not including estimated tax payments for either 2023 or 2024 was less than $500 (or less than $250 if married/RDP filing a separate return). 

• Your 2023 return was for a full 12 months (or would have been if you were required to file) and you did not have any tax liability on that return. 

• The amount of your withholding plus your estimated tax payments, if paid in the required installments, is at least 90% of the tax shown on your 2024 return or 100% of the tax shown on your 2023 return (110% if California adjusted gross income (AGI) was more than $150,000 or $75,000 if married/RDP filing a separate return) and you are not using the annualized income installment method. Taxpayers with California AGI equal to or greater than $1,000,000 (or $500,000 if married/RDP filing a separate return) must use the tax shown on their 2024 tax return if they do not meet one of the two conditions above.

Complete the questionnaire rather than attempt to override the form. If your answers to the questionnaire result in eliminating the penalty, then Form 5805 won't be included with your return. If you otherwise are liable for the penalty, the FTB will calculate it. 

See this FTB webpage for more information about California penalties.

TurboTax calculations are guaranteed. Avoid overriding figures in Forms unless absolutely necessary, as it could serve to invalidate the terms of the 100% Accurate Calculation Guarantee

@OCSeahawk 

@TooTaxedPerson 

@snowtwin59 

@koalawjy 

@marilynsanta