Turbo Tax 2020 not adding Form 2210 for underpayment penalty

[bhtn75]

I called last Sunday, 2/28, re this problem and uploaded my Form 2210 Part IV that showed the error. I received no feedback until Friday, 3/5, afternoon. I wondered if my time spent on this issue was for naught. It would be helpful if there was a way to track valid issues that users brought to TT Support's attention, but all I knew to do is wait and watch the community's posts. 

The feedback that arrived Friday was an email from TT Support saying " TT thanks you for alerting us to this issue (INV-11856)". I'm not certain what the number in parenthesis designates. It is not the token # I was given after uploading my return on Sunday. 

The last paragraph of the email said, "We are working to resolve your issue. You should hear back from us about this as soon as we have an update or fix for you". I assume that others in the community that brought this to TT Support's attention have received the same email. Look for a post here that says it has been fixed in the upcoming days. 

[proteus1966]

So I just installed the latest update for TT and my underpayment penalty is now being calculated using the short method on Form 2210.  Before the update, TT was using the regular method to calculate my underpayment penalty.  

So does this now mean TT has fixed the error for calculating the underpayment penalty?  I signed up to be notified by email once they corrected the underpayment calculation error on the form, buy haven't received any emails from them.

I'm not sure if I should go ahead and file now or wait another week or so. Has anyone else installed the latest update today? Have any errors on your form 2210 appear to be corrected now?  Thanks. Steve

[bhtn75]

 I followed Proteus1966's lead and and downloaded the latest TT update to see if this update also corrected problem with Form 2210 Part IV. Nope. Part IV still has the error where TT fails to carry forward any Overpayment in the first column to columns (b) and (c). 

[Spino]

The only way I know to tell is to manually calculate the underpayment penalty and see if it agrees. The key is, does it apply an overpayment from the first column to the amount due in the third column. (If you don't have an overpayment in the first column it should correctly calculate your penalty, as far as I know.

So:

1) Did I have an overpayment in the first column (which is two quarters worth this year?) If not, things are good. If yes, then...

2) Did this overpayment apply to the amount due in the third column (in spite of the blank second column.) If yes, then the error is corrected. If no, then the error is still there.

Regarding the long method, you only need to use this is you had uneven income through the year. Uneven payments don't matter, and it neither eliminates nor exacerbates the error above.

[redwoodreturn]

I see that "Even though jobless benefits count as income for tax purposes, the newly-signed $1.9 trillion American Rescue Plan will not impose federal income tax on the first $10,200 in unemployment benefits a person received last year.”

Search www.marketwatch.com for

What to do if you already filed taxes but want to claim the $10,200 unemployment tax break

So if you have been waiting to use form 2210 and are eager to file your taxes, those underpaying due to their EDD checks not taking out enough taxes may want to wait some more until IRS sorts it all out.

I have also read that pushing out the stimulus payments has put regular return processing somewhat on the backburner, so if your return has been received but not processed, perhaps there’s a chance that the EDD deduction will be included by the IRS when processing your return?

[edely]

How can I get Form 2210 to complete on Turbo Tax for filing electronically?

[VolvoGirl]

If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year.  Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

If you have the desktop program you can switch to Forms Mode (click forms in the upper right (left for Mac)) and open the 2210 form.  If the 2210 doesn't show up in the left column, click on Open Forms at the top of the left column.  Type 2210 in the search box and open the 2210 form.  Check box C to let the IRS calculate it.

[mhnpdl]

Do you get separate bill for underpayment penalty from IRS ?

I had already paid due amount for 2020 in single payment, but there was underpayment amount of 40.00$. This payment was calculated by turbotax, but never added into due amount. That mean I still owe the penalty amount and file 2210 or any forms to pay back to IRS ?

[KathrynG3]

No, there will not be a separate bill from the IRS for the penalty. This amount is automatically added to the balance due from Line 38 to Line 37. No, this balance due is not still owed to the IRS. Form 2210, page 2, Line 17 is entered on Form 1040, page 2, Line 38. 

2020 Form 1040 Instructions, page 61, 3rd column:

Include any estimated tax penalty from line 38 in the amount you enter on line 37. Don’t include any estimated payments for 2021 in this payment. Instead, make the estimated payment separately.

To check what was filed, download a PDF of the 2020 tax return by following these steps:

• From the left menu, select Tax Home.
• Scroll down to Your tax returns & documents and Show. 
• Select 2020.
• Navigate to the option to download the PDF of your return.
  • The forms are named in the top left and lower right hand corners of each page.

[mhnpdl]

Thanks Kathryn, I found that was added and final value was calculated 🙂

Thanks for the reply.

[JLJ-Strap]

I did my taxes 5/13/21 but it was difficult to find the TTax process to avoid the penality since I had very high capital gains in December. Finally found the info online and searched TTax for form 2210 which eventually led me to find the TTax solution to eliminate the penalty since I covered the taxes on a 1/15/21 estimated tax payment. Seems TTax should have a better procedure. 

[Dwight8]

I have a different issue with underpayment penalties and form 2210.  Volvo girl is exactly right,  you do not have a underpayment as long as you pay at least 90% of this years total tax divided by 4 quarters,  or 110% of your previous years tax if your AGI was over 150k filing jointly.

I actually paid more than 110% of both last years and this years total tax due,  but still it says i have a $44 underpayment penalty??  I talked to 2 different TT people until i was blue in the face trying to figure out the issue?

No luck getting to the bottom of it!?

Is it possible that the whole Turbo Tax Home and Business is calculating the estimated tax returns incorrectly because the Form 2210 is not yet available?

Irritated to the max.  Any help would be greatly appreciated!    

[flenjpa]

Form 2210 for Tax year 2021 won't be available until Fev 17, 2022 according to this site:

https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

[Spino]

Since last year's form was different because of a special tax law change for COVID, and there was an error in how TT did the math on that form, it's very possible that this has not been corrected if this year's form has not been released. You can override the entries (alt-click, override) and even the calculations to get the correct results, and this won't ultimately matter because if you need to file the form, you'll need to wait for it to be released. However, if you don't owe a penalty, you shouldn't need to file the form.

[SJGTX]

I have the same issue in that TT is calculating an underpayment penalty for 2021 even though I always pay 110% of the previous year's taxes and should qualify for a waiver of the penalty.  I am hoping this is because Form 2210 for 2021 has not yet been released yet. Hopefully once the form is available, TT will go back and fix this error.  Please keep us posted if any more info is available.  Otherwise, this must be a glitch in TT that needs attention.