Given the tax liability and estimated payments shown below:
I think I just owe the first quarter's underpayment tax (45 days), since it is made up from the second quarter. But proconnect calculated as below, and I think it is very wrong. How do you think? This should be a support issue, but I am afraid it cannot be resolved during the support session and they refused to open a case, so I think you need to click the link below to support my idea to have a case opened, so the issue can be escalated.
It is Q3 that is the issue. I brought this up on the Lacerte side through phone and email. Both cases were closed and somehow stated the form is functioning as designed. For VA, the day count is correct because the due is May 1. However, the worksheet is incorrectly multiplying the entire Q3 tax liability as 229 days late at 9% rather than the underpayment amount (if any). This is biggest issue. However, it also does not correctly calculate the rate change on September 30th from 9% to 10%. That is a tricky rate change date for quarterly underpayments and probably caused an underlying shift in the code. Just a note, if you plan to pay earlier then it lowers the penalty for Virginia somewhat. You can insert the date of payment to recompute the days late. The default days late on the worksheet assumes payment on the last due date - May 1st. We have a few clients with small quarterly underpayments with large underpayment calculations cause by Q3 issue.
Lacerte worksheet for the $129/quarter underpayment = $233 underpayment penalty! Which is 99% caused by the Q3 coding issue. They also need to incorporate a change for the Sep 30th rate change.
The VA 760 worksheet has a much better set up and method to blend the rates and days lates for each quarter. You can see the underpayment penalty for $129 quarterly payment should be $34.92 at most using the Virginia worksheet for 2023.
These screenshots were provided to Lacerte support but they requested a detailed rate challenge of some kind and closed the case and stated form was functioning as designed.
