Currently I have a client who is underpaid, significantly, for tax year 2020. The program is not calculating the California underpayment penalty. The form simply says "Exception met". I do not see how there is an exception for their situation. They did have a refund in the prior year. Anyone else having this same issue?
Correct, that is my point. The client does not meet ANY of the exception rules. Wanted to know if anyone else had noticed a calculation issue on this page as well.
If you look at the Forms view, you can actually see all the pages of the 5805, that might give away the answer. I don't doubt Lacerte could screw this up, but it seems unlikely.
If everyone is asking about the CA 540, form 5805 then possibly you have an entry in Screen 8 for Form 2210 options (Ctrl + T) [O] in the State column.
Go to forms view and select CA, then check the Show all and look at the 5805. Look at page 5 and see what is c computing there. Maybe you can see something there that solves this problem.
Did the client have California withholding 2019? Did the withholding in 2019 exceed their tax liability in 2019 or was the tax due after withholding less than $500? If yes, that is an exception to the underestimated tax penalty calculation for California. And if they meet that condition, they could have $25M in income in 2020 and no withholding and there would not be a penalty.
