2020 Ca underpayment penalty not calculating??

[YOLOTaxes]

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?

[George4Tacks]

Have you looked at the 5805? It may have the solution right on the form, without even reading the instructions.

[YOLOTaxes]

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. 

[George4Tacks]

Just for fun what are:

2019 tax

2019 withholding + estimates

2020 tax

2020 withholding + estimates

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.

[dbetteloncpa]

Yes, I'm having the same issue.  Did you ever get an answer?

[George4Tacks]

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. 

[GiantFan]

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.