Installment interest in NJ
Hi all,
Did my own taxes for the first time in 2026 for 2025. Wound up owing another $3.3K to NJ when I filed. Paid it in full and thought all was well.
However, I recently received a letter from state of NJ division of taxation stating that "you are being charged installment interest because you did not make the following estimated required payments" the letter then goes on to list the same $xxx.xx estimated payment amount for all 4 payment dates.
What I don't understand is how they came up with those numbers for the required estimated payments they're saying I didn't make. I filled out form NJ-2210 and according to that form, I actually *overpaid* by a couple hundred on 4/15/25 and 6/16/25, underpaid by a couple hundred on 9/15/25 and underpaid by a few thousand on 1/15/26.
Potentially relevant info:
In 2024 I didn't contribute to a traditional 401k. In 2025, I maxed out my traditional 401k, so my taxable income was actually lower on paper in 2025 relative to the prior year.
My taxable income fluctuates throughout the year due to mutual funds I hold in a taxable brokerage account. I didn't sell any positions in those mutual funds in 2025 to realize a profit but according to my consolidated 1099 I was assigned >40K in capital gains all in the last 2 weeks of 2025 which I understand creates a tax liability. However, up until that point in the year I was net negative several thousand in capital gains from exiting two long held losing positions in a clean energy ETF and PYPL.
The amount I'm being charged in installment interest seems excessive given it appears to all be driven by that large capital gain from the last 2 weeks of December.
Would appreciate any insight or clarification offered.
Thank you!