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January 29, 2025
Question

it shows me that I owe State of Maryland interest $265 for 2024 about underpayment , why? i pay my taxes in full the end of the year.

  • January 29, 2025
  • 1 reply
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how to fix this? i am wondering if if the State of Maryland has been doing this me in the past ?

    1 reply

    January 29, 2025

    Underpayment penalties are assessed when you haven't withheld enough tax on income you've received each quarter.  As with federal income taxes, state withholding operates on a pay-as-you-go basis -- that is, you make withholding payments each quarter based on estimated income during that quarter.

     

    More than likely you received non-wage income during the year, with little or no state tax withheld.  If this was the case in the past, it may have happened before.  (Bear in mind that an underpayment penalty can be assessed on your federal return, as well.)

     

    See Line 41. ESTIMATED TAX PAYMENTS on page 18 of the Maryland 2024 State & Local Tax Forms & Instructions for more information.

     

    If you have substantial non-wage income, you should make estimated tax payments during the year.  See the TurboTax Help article Can TurboTax calculate the estimated payments for next year's state taxes? for guidance.

     

    See also the TurboTax Help article Why am I getting an underpayment penalty if I'm getting a refund?, which might apply to you.