Underpayment Penalty

[Snaggletooth]

From Form 2210, it appears that refundable credits may not be used as a "payment" for purposes of adding up estimated tax payments.

Should they? I believe there are now so many of them (in particular the Making Work Pay credit) they may be planned.

[JG EA]

I'm probably missing the point of your question, but Line 3 (on 08 Form at any rate) is where you subtract refundable credits to see if you must pay penalty.

Line 3:

Refundable credits. Enter the total of your earned income credit, additional child tax credit, credit
for federal tax paid on fuels, health coverage tax credit, refundable credit for prior year minimum
tax, first-time homebuyer credit, and recovery rebate credit

Line 4:

Combine lines 1, 2, and 3. If less than $1,000, you do not owe a penalty;
do not file Form 2210

Then this amount is used in computing the penalty if there is one. So figured in.

[Snaggletooth]

Software Maybe?

Thanks JG. I see what you're talking about for 2008, so it might be the software. On the other hand, 2008 did not have a "Making Work Pay" credit. I'll check the IRS for the new 2210.

[Gene V]

Draft from 2210

Line 3 of the draft form 2210 for 2009

3.Refundable credits. Enter the total of your making work pay and government retiree credits,
earned income credit, additional child tax credit, refundable education credit, first-time
homebuyer credit, credit for federal tax paid on fuels, refundable credit for prior year minimum
tax, and health coverage tax credit . . . . . . . . . . . . . . . . . . . . 3 ( )
4 Current year tax. Combine lines 1, 2, and 3. If less than $1,000, stop; you do not owe a penalty.