Turbo Tax 2020 not adding Form 2210 for underpayment penalty

[Cass0317]

Please see the TurboTax FAQ below on how to add the 2210 form manually:

How do I add Form 2210?

[michaelpaschalmp]

I completed the form 2210/2210AI, manually and made sure that the penalty was covered by my estimated tax payments.  Consequently, the penalty cannot increase, while I’m waiting for Turbotax to update the forms. 

[kevinandlori]

As of Feb 21, I suggest you DO NOT USE FORM 2210. I have so far found 5 errors in the TurboTax calculation:

1. When using the annualized installment method, line 10 column (a) in part 3 of form 2210 is supposed to be equal to schedule AI line 27 column (a). Instead, it is equal to line 27 column (a) + line 27 column (b).

2. The tax computations on schedule AI, line 14 column (a), (b), and (c) are incorrect.

3. Self-employment tax on line 15 of schedule AI is incorrectly also included in line 16, resulting in a double-counting of self-employment tax and a line 17 column (d) total tax that incorrectly exceeds the total tax shown on form 1040 line 24.

4. 2020 refunds applied to 2021 are supposed to count as a tax payment starting in the first quarter of 2021. Instead, 2020 refunds applied to 2021 are incorrectly ignored on form 2021.

5. Line 7 schedule AI incorrectly excludes amounts on line 12(b) of form 1040.

[flenjpa]

I hope you report these errors to Turbo Tax. :(

[Mike M3]

You may want to check the annualized calculation. It appears that the calculation on form 2210 line 10, is not correctly pulling the 1st quarter number required installment number from line 27 form 2210AI, thus causing an incorrect penalty calculation. I hope this will be updated soon.

[Mike M3]

I thought this was a 2021 tax year post. Please disregard my last reply.

[flemming]

Post label says 2020,  however it correctly applies to current major error in the current tax year 2021.

Those using annualized income method (Form 2210-Box C) will want to hold filing until

TurboTax corrects errors.   Hard to believe after all the errors in tax year 2020, we  have to fight

the battle again on 2021 taxes.

[SJGTX]

I, too, found errors on 2210 for 2021.  Here is what I found when I analyzed my 2210 preliminary form on TT. 

As for background info, we shouldn't have to pay a penalty because we paid over 110% of last year's tax liability. That said, TT was initially calculating a penalty for us so we opted to treat the withholding payments in the quarter they were paid instead of dividing them into 4 installments - in our case, my husband retired in the first quarter and the first quarter withholding was large because of his pension withholding, prior year tax overpayment applied to 2021, and the withholding for his job (before he retired.)

Here is the error I found on the Form 2210:

The overpayment from 2020 taxes applied to 2021 did not appear in Part III, Line 11, column (a) as per the instructions for Form 2210; instead it appeared in the final column Line 11, column (d). This made the calculations show an underpayment for all the prior periods instead of an overpayment in each period.

The interesting thing is that regardless of what is showing on the Form 2210,  there was no penalty listed on the Form 1040-SR, line 38.  So, it appears we are no longer paying a penalty, even the Form 2210 has errors.

I might go back and see what happens if I eliminate the option to base the penalty on the actual time the withholding occurred to see if TT correctly calculates that no penalty is owed because we paid over 110% of the prior year taxes, but I am afraid to rock the boat if no penalty is currently showing. 🙂

[Rickp973]

There are a few long posts on this issue. Form 2210 is a complete mess with numerous errors.

I spoke with a support agent to report the problems which was a complete waste of time (2 hours).

My advice is to not attempt to use this form. We can all only hope that Intuit will release an update with corrections before the filing deadline however this does not seem to be on their radar at this point.

In the meantime, I guess we are expected to just keep checking.

Good Luck all. 

[BillM223]

The issue of line 27(a) on 2210AI being "doubled" or increased a lot when transferred to line 10(a) has been corrected as of yesterday on the CD/download product (I assume it's been done for Online also) as of 2/23/2022. Please let me know if you see differently.

@Mike M3

@kevinandlori

[Xuser]

1. Form 2210AI Line 10 column (a) has finally been corrected as of the update I downloaded on 2/25.

2. The tax computations on schedule Form 2210AI Line 14 columns (a), (b), and (c) are still incorrect if you have any capital gains or dividends in those time periods (calculated number less than it should be). I tested it by deleting capital gains and dividends in the first 3 time periods and TurboTax got the right answer. For some reason, it can look up taxes in tables, but it can't figure cap gain/dividend taxes correctly on this form.

The other situations don't apply to me, so I don't know if they are a problem or not. I'm tired of this and may file as is. No errors when running error check. I don't owe a penalty with either the correct or incorrect Line 14 calculations. I spent 1.5 hours with a specialist on 2/21 to explain the Line 10 issue. I don't have the patience to call again. TurboTax - Thanks so much for having your users tell you how to produce a usable product they paid for.

[hes47]

I have manually entered Form 2210AI, Line 1 columns a, b, and c.  Line 7, does not include amount from 1040, Line 12b. as per the instructions. I override Line 7, and enter my Qualified Dividends on Line E, columns a, b, and c. The tax calculation for Line 14, column a, calculates accurately from the tables. But columns b and c just repeat the number from column a.  I override columns b and c with for amounts from the tables.

[Xuser]

TurboTax applies 100% of your charitable contribution (1040 Line 12b) as having been made after 9/1/22.

[BillM223]

hes47, Are you saying that while line 14(a) (2210AI) is calculated correctly, that 14(b) and 14(c) are not?

"I override columns b and c with for amounts from the tables."

Note that line 14 is not calculated from the tax tables, but from the Qualified Dividends and Capital Gains Worksheet. There may be an issue with this calculation; however, if your Qualified Dividends are near zero, you shouldn't notice the difference between the Worksheet and the tax tables.

@hes47

[kevinandlori]

There are several problems with Form 2210 that remain as of March 5:

1. Failure to include 2020 refunds applied to 2021 taxes. 2020 refunds applied to 2021 taxes are not credited as tax payments in any column of Form 2210, Part III Line 11. (Part 2 Box C is checked, Box D is not). Instructions for Line 11 state they should be included: "Include the following payments: Any overpayment from your 2020 return applied to your 2021 estimated tax payments." For those that filed by April 15, the credit should be included in the first quarter for Line 11, but TT fails to include it in any quarter.
2. Failure to include above-the-line charitable contributions. As many have pointed out, Schedule AI, line 7 fails to include any amount on Form 1040, line 12(b) (above the line charitable contributions: up to $300 single / $600 MFJ). Taxes calculated on lines 14(a), 14(b), and 14(c) are therefore slightly higher than they should be. (The deduction is properly included in the final tax calculation in 14(d), even though the taxable income shown on line 13(d) is incorrect.)
3. Tax computation in Schedule AI, line 14 (a), (b), (c). TT assumes that capital gains are one-time events for each quarter, while qualified dividends will continue throughout the year. Consequently, qualified dividends are annualized by multiplying by 4, 2.4, and 1.5 for the first through third quarters in the tax calculation, but capital gains are not multiplied by any factor. For example, if you are married filing joint and have $50,000 in income that includes $1000 in capital gain in the first quarter, TT calculates the taxes on (4*$50,000)-$1000 = $199,000 at regular tax rates and $1000 at 15% tax rates. However, if you have $50,000 in income that includes $1000 in qualified dividends it calculates the taxes on (4*50,000)-4*$1000 = $196,000 at regular tax rates and 4*$1000 = $4000 at 15% tax rates. The underlying assumptions that qualified dividends are recurring (and hence should be annualized) but capital gains are one-time-events (and hence should not be annualized) are reasonable for many, but not all.