Utah penalty not calculating right.

[taxsolutions]

Proconnect doesn’t calculate the Utah tax penalty the same way that the Utah State tax commission does. I just got a late payment notice from Utah that charged a 10% penalty ($4,000 on $40,000 tax) for a return filed on 4/14 but not paid until 6/1. Proconnect only calculated a $20 FTP penalty.

BTW I worked for a previous firm that used UltraTax and they calculated it differently too.

I called the both the Utah Tax Commission and UltraTax and they both insisted that they were doing it right. Coincidently shortly after I called, Utah took down their penalty calculator on their website.

For anyone who is interested here are the Utah rules from Pub 58.

We may assess a late payment penalty for payments you make after the due date.

To avoid a late payment penalty you must pay all tax due before the return due date, or pay all tax, interest and penalties:

1. within 90 days of the due date with a late filed return,
2. on the same day an amended return is filed, or
3. within 30 days of an audit assessment. See number 5 under Penalty Detail, below.

The late payment penalties are as follows:

1.Return filed by due date but underpaid; or extension return filed but tax underpaid on original due date:

Days Late	Penalty
1-5	Greater of $20 or 2% of unpaid tax, fee or charge
6-15	Greater of $20 or 5% of unpaid tax, fee or charge
16 or more	Greater of $20 or 10% of unpaid tax, fee or charge

1. Return filed after due date and not paid in full within 90 days of due date:

Days Late	Penalty
91-95	Greater of $20 or 2% of unpaid tax, fee or charge
96-105	Greater of $20 or 5% of unpaid tax, fee or charge
106 or more	Greater of $20 or 10% of unpaid tax, fee or charge

[sjrcpa]

When you filed the return did you indicate payment would not be made until June? (If you can even do that).

[BobKamman]

I wouldn't just call those penalty rules harsh.  I would call them a disgusting abomination.  

[George4Tacks]

Is this how you set up the penalty computation?

Did you then click the next "tab" for State & Local Int. Rates and enter the UT rates? .

From  https://accountants.intuit.com/support/en-us/help-article/federal-taxes/enter-federal-state-interest...

 To generate interest and penalty amounts for a late return:

1. Go to the Input Return tab.
2. On the left-side menu, select Payments, Penalties & Extensions.
3. Click on Penalties and Interest (2210).
4. Enter the date this return will be filed in the Filing date field.
5. On the top navigation menu, select Late Return Penalty & Interest.
6. Enter 1 in the Interest (1=automatic), Late filing of return (1=automatic), and Late payment of tax (1=automatic) fields
   • The federal interest rates are built into the program.
   • If state interest rates are needed, select State & Local Int. Rates across the top and enter the applicable interest rates.

[taxsolutions]

I didn't calculate the penalty when filing because I thought they would pay on time. I went in after the fact and noticed. Proconnect won't trigger the 10% penalty until after 10/15. 

[taxsolutions]

Yes that's how I set it up.

[taxsolutions]

I thought that I was the only one who thought that. Its nice to know I'm not alone.