OAR 150-316-0497: Estimated Tax: Single or Separate Returns to Joint Return

For estimated tax payments beginning on or after Jan. 1, 1988, in computing the required instalment for the current year, the tax liability for the prior year may be used even though the current year is a joint return and the prior year’s returns are single or separate returns. This is done by combining the net income tax amounts from the previous year’s returns of both spouses. The previous year’s returns of both spouses must be filed timely including extensions, must have a tax liability, and must cover 12 months. Example: Al and Darlene filed separate income tax returns for the calendar year 1987, showing tax liabilities of $2,640 and $350, respectively. In 1988 they elected to file a joint return. For the purpose of determining the required instalment mentioned above, the previous year’s net income tax would be $2,990 ($2,640 plus $350).