Underpayment Penalty Calculation with Recent IRS California TAX Relief

Forum|Forum|3 years ago
March 20, 2023
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Since the IRS provide tax relief for California Storm victims that among other moves deadline for payment of 2022 4th installment of estimated underpayment tax from 1/17/23 to 10/16/2023, the penalty for not paying the 4th installment by 1/17/2023 should be removed. Is my assumption correct? If so, will 2022 TurboTax program be revised to account for this IRS tax relief?

MonikaK1

Victims of severe winter storms, flooding, and mudslides in certain California counties beginning January 8, 2023, now have until October 16, 2023, to file various Federal individual and business tax returns and make tax payments. See this IRS news release, which was last updated on February 23, 2023, for more details and to confirm whether your situation qualifies.

The disaster declaration permits the IRS to postpone certain tax filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Jan. 8, 2023, and before Oct. 16, 2023, are granted additional time to file through Oct. 16, 2023. As a result, affected individuals and businesses will have until Oct. 16 to file returns and pay any taxes that were originally due during this period. This includes 2022 individual income tax returns due on April 18, as well as various 2022 business returns normally due on March 15 and April 18.

Affected taxpayers that have an estimated income tax payment originally due on or after Jan. 8, 2023, and before Oct. 16, 2023, are postponed through Oct. 16, 2023, will not be subject to penalties for failure to pay estimated tax installments as long as such payments are paid on or before Oct. 16, 2023.

Because this declaration is available on an individual basis depending on their circumstances, tax software isn't updated to show the extended filing and payment guidelines. If you receive a notice from the IRS, call the telephone number on the notice to have the IRS abate the penalty.

In the underpayment penalty section, answer the questions that appear and indicate that you were in a disaster area if applicable.

You can use a step-by-step method of getting to the underpayment penalty section:

Log in and click Take Me to My Return
Click Federal Taxes (Personal if in Self-Employed)
Select Other Tax Situations
Scroll down to Additional Tax Payments
Click start/edit next to Underpayment Penalties

See here for the latest guidelines for California state taxes.

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PhilBSooner

This worked on Federal return so thank you much. Still, I had to override my payment date on the California return in 2/14/24 version of TurboTax because I could find no request for a waiver form for the "FTB". .