When I apply my refund to 2021 taxes, when is it credited to my taxes?

[NMtaxpayer]

I believe I will owe around 10,000 in taxes in 2021.  Because of this I applied 10,000 of my 2020 return to my 2021 taxes.  If my calculations are correct, I'd like to know if applying my refund with allow me to avoid penalties?  I was wondering when exactly the 10,000 would be applied to my 2020 taxes...would the full amount be applied before Q1 2021 if I submitted the return on time?  (i.e., I want to make sure I'm not going to be penalized because I didn't make quarterly estimated payments instead of applying the full amount from the refund.)  Thanks,

[DavidD66 · Accepted solution]

If you have already filed your tax return, and you use some or all of your refund towards 2021 estimated tax, it will be credited to your account in the first quarter.  You won't be penalized if you don't any additional tax.

[fanfare]

@NMtaxpayer 

You have essentially paid all your Estimated Tax in one shot instead of spreading it over four quarters.

The "amount paid with refund" serves as your first Estimate Tax Payment.

If you pay ahead at least 90% of last year's tax bill, there is no penalty.

You have paid over 90% of the coming year's tax bill