Answered
Overpayment - Applied Penalty
I understand we should review all returns while processing, but it can be tedious to go back and review this part for every single one. Since the return has a line item for amount applied to penalty, is there a way to get that category added? We had a return that had an amount for a penalty applied from overpayment, and the remaining overpayment applied to estimated taxes. The penalty amount showed as a refund which was confusing to the client. Technically it's not an overpayment applied to next year, rather applied to a penalty.
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Hi Sara, we certainly understand how this system limitation can cause these errors to occur. Since the penalties and interest fields vary across federal and state forms, we haven't been able to adopt a standard field to recognize them yet. We hope to provide more automation for these sorts of items in the future.
We have added your firm information to the enhancement request we have open with our product team.
Not sure if there's been any activity or not, but every return I've done this afternoon, I've had to delete the overpayment amount as the penalty and interest isn't picking up. Maybe a compromise is to pick up Federal since that's consistent.
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