E-file diagnostic: Form 2220, Page 2: A default interest rate is used
Form 2220, Page 2: A default interest rate is used on line 28. Interest rates must be updated to calculate the correct 2220 underpayment penalty. These rates are issued quarterly by the IRS.
This happens when you don't have interest rate information required by the state for e-filing.
Solution 1
This is a severe diagnostic and won’t keep the return from qualifying for e-filing.
While the IRS updates interest rates quarterly, the interest rates are not necessarily updated quarterly in the software. Therefore, you need to make sure the rates are current with what is in section 6621.
Solution 2
Enter rates:
- InOrganizer, go to theEstimates and Penaltiesfolder.
- SelectUnderpayment of Estimates, then thePenalties/Interesttab
- In theUnderpayment Interest Rates (Overrides)section, enterRates. Rates are not updated quarterly in software.
- Do a full recompute and recreate the E-.
Solution 3
Suppress the compute option diagnostics.
- InOrganizer, go to theEstimates and Penaltiesfolder.
- SelectUnderpayment of Estimates, then the2220 Penaltytab.
- In theCompute Optionssection, selectSuppress the compute option diagnostics.
- Do a full recompute and recreate the e-file.
Solution 4
- Go toOrganizer,Estimates and Penaltiesfolder.
- SelectUnderpayment of Estimates, then the2220 Penaltytab.
- In theUnderpayment Penalty Compute and Print Optionsection, use the dropdown to selectOption 2orOption 4to prevent the 2220 from being included in the e-file.
- Do a full recompute and recreate the e-file.
note
You don't need to include Form 2220 in the electronic file if there is no underpayment penalty. There is not a way to force it to be included.
