OAR 150-316-0470: Allocation of Joint Estimated Tax Payments

(1) Spouses in a marriage may make joint estimated tax payments for any part of the tax year although they may elect to file separate tax returns. If separate returns are filed the joint estimated tax payments may be treated as the estimated tax of either the husband or wife or may be divided between the spouses in such manner as they agree. (2) If the spouses do not agree on how to divide their joint estimated tax payments, the payments shall be allocated between them by the department. Spouses will be considered not to have agreed on a method for dividing their joint estimated payments when both spouses file separate returns claiming credit for estimated tax payments which when combined do not equal the amount of joint estimated tax payments received by the department during the tax year. (3) The department shall divide the joint estimated tax payments by allocating to each spouse an amount of the payments in the proportion that the spouses’ separate tax liability computed after credits, other than the credits for withholding and estimated tax payments, bears to the combined separate tax liabilities of both spouses. The formula to be used is: Separate tax liability — (divided by) — (Combined separate tax liabilities x joint estimated tax payments) During 20XX, Adam and Betty make joint estimated tax payments of $2,000, Betty also has tax withholding of $1,000. Adam and Betty decide to file separate returns for 20XX but fail to agree on how to divide their 20XX joint estimated tax payments. Adam has a separate tax liability after credits of $1,500. Betty has a separate tax liability of $1,100 before credit for withholding of $1,000. Using the formula stated above, Adam’s share of the estimated tax payments is $1,154 ($1,500 ÷ $2,600 x $2,000). Betty’s share of the estimated tax payments is $846 ($1,100 ÷ $2,600 x $2,000). Adam will owe a net amount of $346 ($1,154 – $1,500) and Betty will receive a refund of $746 ($846 + $1,000 – $1,100). (4) If spouses in a marriage make joint estimated tax payments and the department issues a notice of assessment against either or both of the spouses under the provisions of ORS 305.265(10), the department shall allocate the estimated tax payments between the spouses. The allocation of payments shall be made using the best information available to the department. (5) In the event one of the spouses received credit for more than their allocable share of the joint estimated tax payments as determined by the department, the difference between their allocable share and the amount for which credit was received when the return was processed, shall be remitted to the department. This amount shall be remitted with the filing of an amended return or through payment of a notice of deficiency issued by the department.