$1400 was still owed, but since the prior's year liability was covered, there should not be a penalty. Proseries calculated $0 on Form760C.  I also thought that as long as the post mark was timely, there was no penalty, though this client sent out checks a week early each. I have written a letter, and will see if it garners a response. Virginia is rather aggressive in sending out these underpayment penalties, for any tax return that owes more than a whopping $150.