Current through Register Vol. 63, No. 9, September 1, 2024
(1) Definitions for
purposes of this rule:
(a) "Open estimated
tax account" is an account to which estimated tax installments may be made
under ORS 316.579.
(b) "Estimated tax underpayment period" is
the period after the due date for the fourth estimated tax installment but
prior to the due date for filing the related tax return, excluding extensions,
for that period. This period is generally January 16 through April 15 (when the
taxable year is a calendar year).
(2) If a taxpayer elects on a return to have
an overpayment of tax applied to an estimated tax account, the department
generally will apply the overpayment to the subsequent year's open estimated
tax account.
(3) Exceptions:
(a) Before the taxpayer's overpayment is
applied to the open estimated tax account, the overpayment will first be
subject to offset under ORS
314.415 and related
rules.
(b) If there are two open
estimated tax accounts for the same taxpayer (between January 1 and January 15
when the taxable year is the calendar year), any amount requested to be applied
to an estimated tax account will be posted to the tax year which is the later
of the two open estimated tax accounts unless the taxpayer has requested in
writing that the overpayment be applied to the earlier of the two open
estimated tax accounts.
(c) If a
taxpayer files a delinquent or amended return claiming a refund between the due
date for a subsequent tax year's fourth estimated tax installment and the due
date for filing the return for the subsequent tax year, excluding extensions
(between January 16 and April 15 when the taxable year is the calendar year),
any amount requested to be applied to an estimated tax account will be posted
to the open estimated tax account unless the taxpayer has requested in writing
to have the overpayment applied against the estimated tax underpayment period
to reduce interest on any underpayment of the estimated tax
liability.
(4) Refunds
from original returns. If a taxpayer requests to apply an overpayment from an
original return filed on or before the return due date (including extensions),
the department will apply the overpayment as of the first estimated tax
installment due date of the open estimated tax account (generally April 15) or
the date the overpayment was made, whichever is later.
Example 1:The taxpayer files
their 2017 Oregon personal income tax return on March 31, 2018. The return
shows a refund due. The payment that created an overpayment was made on January
15, 2018. The taxpayer elects on the return to have the refund applied to an
estimated tax account. The overpayment is credited to the open estimated tax
account as of April 16, 2018, which is the later of the due date of the first
installment of estimated tax due for tax year 2018 or the date the payment
creating the overpayment was made.
Example
2: The taxpayer files their 2017 Oregon personal
income tax return under extension on October 12, 2018. The return shows a
refund due. The payment that created an overpayment was made on July 6, 2018.
The taxpayer elects on the return to have the refund applied to an estimated
tax account. The overpayment is credited to the 2018 estimated tax account as
of July 6, 2018, which is the later of the due date of the first installment of
estimated tax due for tax year 2018 or the date the payment creating the
overpayment was made.
(5)
Refunds from delinquent returns. If a taxpayer requests to apply an overpayment
from a delinquent return to an open estimated tax account, the department will
apply the overpayment to the estimated tax account as of the date the
delinquent return is filed or the date the overpayment was made, whichever is
later.
Example 3: The taxpayer
files a 2017 Oregon personal income tax return late, on October 25, 2018,
showing a refund due. The payment that created an overpayment was made on April
10, 2018. The taxpayer elects on the delinquent return to have the refund be
applied to the taxpayer's estimated tax account. The overpayment is credited to
the 2018 estimated tax account as of October 25, 2018, which is the later of
the date the delinquent return was filed or the date the overpayment was made.
The refund is applied to the fourth installment of estimated tax due for tax
year 2018.
Example
4:The taxpayer files a 2016 Oregon personal income
tax return on January 10, 2018, showing a refund due. The payment that created
the overpayment was made on October 15, 2017. The taxpayer elects on the
delinquent return to have the refund applied to the taxpayer's estimated tax
account. As of January 10, 2018, there are two open estimated tax accounts for
the taxpayer:1) the fourth installment for tax year 2017 and 2) the first
installment for tax year 2018. The refund is credited as of January 10, 2018,
toward the first installment of estimated tax due for tax year 2018, due April
16, 2018. After the return has processed, the taxpayer writes to the department
and requests that the 2016 refund instead be applied to the fourth installment
for tax year 2017. The department moves the estimated tax payment from tax year
2018 to tax year 2017. The payment is applied as of January 10, 2018, toward
the fourth installment for tax year 2017.
Example 5:The taxpayer files a
2016 Oregon personal income tax return on March 1, 2018, showing a refund due.
The payment creating an overpayment was made on February 20, 2017. The taxpayer
elects on the delinquent return to have the refund applied to the taxpayer's
estimated tax account. The taxpayer has not yet filed their 2017 Oregon
personal income tax return. The overpayment is credited consistent with section
(3)(c) of this rule to the 2018 estimated tax account as of March 1, 2018.
After the 2016 Oregon return has processed, the taxpayer writes to the
department to indicate they would like the refund applied to the 2017 estimated
tax underpayment period. The department moves the application from tax year
2018 to tax year 2017 and applies the payment as of March 1,
2018.
(6) Refunds from
amended returns. If the taxpayer elects on an amended return to have an
overpayment applied to estimated tax, the department will apply the overpayment
to an open estimated tax account. The overpayment shall be applied as of the
date the amended return is filed or the date the payment is made, whichever is
later. If interest is due on the overpayment, the interest will stop accruing
on the date the amended return is filed.
Example
6: A taxpayer files a 2017 Oregon personal income tax
original return timely on March 13, 2018. The taxpayer then files a 2017 Oregon
amended return on October 15, 2018, claiming a $500 overpayment and electing to
have the entire refund applied to the open estimated tax account. The payment
creating the overpayment was made on February 1, 2018. The refund is applied to
the taxpayer's 2018 estimated tax account as of October 15, 2018, the later of
the date the amended return was filed or the date the overpayment was made.
Interest on the overpayment is calculated starting June 2, 2018, 45 days after
the return due date (excluding extension), and ending October 15, 2018, the
date the return was filed.
Publications: Contact the Oregon Department of Revenue to
learn how to obtain a copy of the publication referred to or incorporated by
reference in this rule pursuant to ORS
183.360(2) and
ORS 183.355(1)(b).
Statutory/Other Authority: ORS
305.100 &
316.583
Statutes/Other Implemented: ORS
316.583,
316.579 &
314.415
