Here is the key point.
The income tax system is supposed to be pay-as-you-go. When you have a job, this is taken care of automatically through the withholding system. When you are retired or unemployed or have a large lump sum of income during the year, you are required to make estimated tax payments at least quarterly. This means making a payment by April 15 for income earned January through March, by June 15 for income earned in April and May, by September 15 for income earned in June through August, and by January 15 for income earned September through December.
The IRS definitely requires estimated tax payments and most states do as well. If you fail to make the estimated payments on time, you can be subject to a late payment penalty even if you pay fully by the April 15 (or May 17 of this year) tax filing deadline.
Because you owed tax this year, TurboTax gave you estimated tax vouchers to make estimated payments for 2021 and avoid a penalty next year. You do not have to use the vouchers if you know that you will avoid a penalty because you will make estimated payments in another way or that your tax situation will be different.
For federal income taxes, TurboTax used to give taxpayers the option of declining the penalty. I always suggest this, because if you wait for the IRS to send you a bill for the penalty, you can request a one time abatement if you have a reasonable cause or if it is your first time owing a penalty. I don’t know if your state would have a first time of penalty forgiveness, but it sounds like TurboTax is not even allowing you to bypass the penalty. I suspect that your best option is to mail is to file your tax returns and pay the tax you owe with the penalty. The state and or IRS may send a bill for an additional penalty amount or may send a small refund, because the penalty calculation performed by the IRS is very complicated, and the penalty recommended by TurboTax is almost always a few dollars wrong one way or the other resulting in an extra bill or letter from the IRS. At that point, you could file the forms to request an abatement of the penalty as a first timer.
