PA estimated payment calculation

[mtdog57]

Doing my 2022 PA State Tax it stated that I did not have to pay a quarterly Estimated payment in 2023. Apparently, that may not be true as I received a notification regarding an underpayment penalty for 2022.  Upon further research any individual who expects to receive more than $8,000 of PA-taxable income not subject to withholding by a PA employer must  be estimated for the year and paid quarterly. This would be interest income and dividends. 

I would have expected Turbo Tax to know this provision for PA State Tax.   

[SteamTrain]

You don't necessarily have to use PA estimated tax forms to pay those extra taxes during the year...you could instead increase the PA withholding on whatever W-2, or pension income you do have.  IF that extra PA  withholding covers all your PA taxes for the year (without making quarterly estimated tax payments), and you get a PA refund from just the excess withholding, then no penalty will be applied.

But yeah, if you owe too much to PA at tax time, a penalty might be applied.  TTX cannot know how much unearned income you will get during the year, for which no PA taxes are withheld, especially for year-end Mutual fund distributions that can be big$$ for some accounts.

If you do get appreciable unearned income during the year (interest, dividends, capital gains) for which you cannot cover the extra taxes with your other regular PA withholding, then it is a good idea to go thru the PA estimated tax calculations in the last section of the PA interview.....usually within a section labelled as "Other Tax Situations"

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....OR...

You can get the PA-40 ES forms (to mail in your estimated payments)  directly from PA yourself at:

2023 Personal Income Tax Estimated Forms (pa.gov)

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The Rev-413 and Rev-414 PDF files on that page may also be of help in determining how much to pay.