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Extensions

Failure to Pay penalty on return that was extended

If an extension is calculated and 90% of the tax liability hasn't been paid, the application will show a Failure to Pay (FTP) penalty calculation. If the taxpayer did pay 90% of the tax liability and the application is still calculating an FTP penalty, review the following:
  • Calculate extension
     on the Ext screen in the Payments folder. If
    Calculate extension
     is blank, the application won't recognize that an extension was filed, even if there is an extended due date entered.
  • Date return filed
     on the
    Pen
     screen in the Payments folder. Verify that the date used is correct, as it is used when calculating penalties..
  • Paid with 4868 ext
     on the
    Est
     screen in the Payments folder. If the amount is not at least 90% of the tax liability on the tax return, the application will calculate the FTP penalty.

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