"If Form 2210, Part II, Line A checkbox 'WaiverOfEntirePenalty' is checked, the [waiverexplanationstatement] must be attached to Form 2210". Is this a TurboTax issue?

My federal return was rejected when I filed electronically and TurboTax is telling me this is the problem: 

"If Form 2210, Part II, Line A checkbox 'WaiverOfEntirePenalty' is checked, the [waiverexplanationstatement] must be attached to Form 2210" 

This sounds like a TurboTax issue (i.e. not a data entry issue on my part) since Box A in Part II of Form 2210 is checked and TurboTax entered "85% Waiver" next to it?  Not sure how to proceed, so appreciate any insights anyone can provide! 

Answer

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Hi, folks,

There are different reports of success/failure from different users with possibly different situations.  After spending over an hour on the phone with turbotax level 2 support, I want to relay what they told me.  Disclaimer - I do not work for TurboTax, so take with appropriate salt.  

My situation:
* I am on the desktop version of TurboTax (Deluxe for MacOS)
* I have an underpayment of estimated taxes.
* I qualify for the waiver related to the Tax Cuts and Jobs act (see below)

This is specifically the situation that SHOULD have form 2210 attached, with line A in Part II checked, with the phrase "85% waiver" in the text on line A.  (there are various DIFFERENT situations that require form 2210, which might have different issues/fixes, and there are reportedly issues where TT is adding this form/data where it's not required).  

In this specific case, I tried the recommended workaround here - go into Forms view, click on the "Explain" link on Line B, and attempt to create the Explanation Statement.  I then tried submitting my taxes, up to and including this morning.  Result - taxes were rejected.  Also, in the PDF of my taxes, I do not see the explanation statement.

Per a conversation with TurboTax support, SPECIFIC to the Line A/85% Waiver situation, WHERE the waiver is legitimately required due to underpayment, there IS NO WORKAROUND for e-filing.  No one with this situation can e-file.  Additionally, problems TurboTax has fixes in process for generally have dates assigned (e.g. "2 days," "5 days") for when they will be fixed.  This problem does NOT have a fix date, meaning (I am told) no fix is in progress, and it's not guaranteed there WILL be a fix.  They recommend for all filers to file by mail in this situation.  The people I spoke to were very conversant with the form 2210 issues, so I have no reason to doubt they understand what my situation is.  

TurboTax has a 100% satisfaction guarantee, and they are processing a refund for what I paid in my case.  I suspect that would apply to anyone similarly situated.  

It likely IS possible to efile by removing form 2210, by allowing the IRS to calculate the tax penalty for underpayment.  This is NOT RECOMMENDED if you (like me) have a real underpayment - the waiver of penalty needs to be claimed, so effectively you WILL owe money that you would NOT OTHERWISE OWE if you go that route.  

There is a potentially DIFFERENT issue that some people are reporting, where there is NOT an underpayment (and so no penalty to be waived) where they are getting form 2210 generated, with Part II Line A checked, and the 85% waiver text.  My answer above does NOT necessarily apply in this situation - it's possible TT is working on a fix for that situation, or that removing the 2210 manually via the forms link is a "safe" approach in that case.  The original problem report does not make it clear which situation applies.  

For those wondering what the heck is going on with this situation (disclaimer - I'm not a tax professional either), or where it came from, this is related to the Tax Cuts and Jobs act.  Basically, the tax rules changed mid-year, and the IRS then had to develop guidance to taxpayers, meaning some people might have underpaid through no fault of their own.  For this year only, the IRS is WAIVING penalties for underpaying your estimated taxes as long as you paid at least 85% of the total tax due over the course of the year.  That's what this means - you file the form that you underpaid, but claiming the waiver, so you won't owe a penalty.  This is a good deal for you if you qualify.  There's a worksheet to determine if you qualify for a waiver, and if you do, you check the box and state you're claiming the 85% waiver.  An explanation statement is supposedly not required in this situation by the IRS.  If you want to learn move, go to irs.gov, search for form 2210, and read the instructions for filling out the form.
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