OAR 150-316-0493
Required Installments for Estimated Tax

(1)

Definitions.

(a)

“Required annual payment” means the total amount of required installment payments for the tax year.

(b)

“Required installment payment” means the amount of the payment that is due for each of the four payment periods during the tax year.

(2)

There are two steps to determine estimated tax payments. The first step is to determine the required annual payment, and the second step is to determine the amount of the required installment payments.

(3)

Determination of required annual payment amount.

(a)

The required annual payment is the lesser of:

(A)

Ninety percent of the tax shown on the return for the taxable year (or, if no return is filed, ninety percent of the tax for such year); or

(B)

One hundred percent of the tax shown on the prior year’s return, if qualified. This is sometimes referred to as ‘safe harbor.’ To use the prior year’s tax to determine the required annual payment, the prior year’s return must be filed before the current year’s return, and the prior tax year must consist of 12 months.
Example 1: Amanda’s adjusted gross income on her 2012 return was $30,000 and her Oregon tax liability after credits was $2,000. Amanda’s 2013 Oregon tax liability after credits is $2,800. Ninety percent of the 2013 tax after credits is $2,520. She can use the prior year tax and pay 2013 estimated tax payments equal to 100 percent of her 2012 tax liability ($500 on each installment due date).

(b)

A part-year resident may use the prior year tax unless disqualified for a reason described in this section.
Example 2: Michael moved to Oregon from California on July 1, 2012 and filed as a part-year resident. His 2012 Oregon tax after credits was $1,500. Even though his 2012 return shows 6 months of Oregon residency, his taxable year for 2012 was 12 full months. He qualifies to use safe harbor (prior year tax) to determine his required annual payment for 2013. This is less than 90 percent of his 2013 tax, so he will use that to determine his required annual payment. His required installment payments in 2013 are $375 for each period (25% of $1,500) for regular installment payments, or the applicable percentage if using the annualized income installment payments, in order to avoid interest on underpayment of estimated tax for 2013.

(c)

Use the amounts from the original return to determine the payments unless an amended return was filed before the due date, including extensions. In that case, use the amounts from the amended return to determine the required annual payment. Amended returns filed after the due date of the original return, including extensions, cannot be used to determine the required annual payment.
Example 3: Aliyah’s original tax return showed a tax liability after all credits of $1,400. Aliyah did not file an extension. In July, the return was amended and the tax liability after credits was $1,200. Aliyah bases her required annual payment on the $1,400 tax shown on the original return.
Example 4: Shaylee’s original tax return was filed June 29, 2012 with an approved extension to October 15, 2012 showing a tax liability of $1,975. On October 09, 2012 the return was amended and the tax liability was reduced to $1,245. In 2013, if Shaylee chooses to use the prior year’s tax, the required annual payment is based on the $1,245 tax shown on the amended return filed within the extension period.

(d)

Estimated tax payments are not required if the amount of the required annual payment minus Oregon tax withheld is less than $1,000. For information about additional exceptions, see ORS 316.563 (When declaration of estimated tax required) through 316.588 (When interest on underpayment not imposed), and OAR 150-316-0475 (Estimated Tax: Farmer’s and Fisher’s) through 150-316-0491 (Estimated Tax: Partnership and S Corporation Income of Part-year Residents and Nonresidents).
Example 5: Brandon and Michelle are married and have three children. Brandon is self-employed. Michelle works part-time. They want to know if they are required to make estimated tax payments. Their estimated 2013 adjusted gross income is $75,000, their estimated net itemized deductions are $13,500 and they expect to have $630 withheld from Michelle’s wages.[Table not included. See ED. NOTE.]

(4)

Determination of the required installment payment amount.

(a)

The required installment payment for each of the four tax periods is the lesser of the payment due under one of the following two methods for determining the amount of an installment payment:

(A)

Regular Installment: The required installment payment for each period is 25 percent of the required annual payment.

(B)

Annualized Income Installment: The required annualized income installment payment is the “applicable percentage” of the required annual payment for the taxable year minus the amount of any required installments paid for prior periods during the tax year. The applicable percentages are:
(i)
22.5% for the first period;
(ii)
45% for the first and second periods;
(iii)
67.5% for the first, second and third periods; and
(iv)
90 % for the first through fourth periods.

(b)

If the taxpayer shows that the annualized income installment for a period (as determined from the annualized income worksheet) is less than the regular installment for that period, the amount of the required installment payment for that period is the annualized income installment.

(c)

If the annualized income installment method is used to determine a required installment payment, the difference between that amount and the amount that would have been due if the regular installment method had been used must be added to the required installment payment for the next succeeding period.

(d)

Generally, credits based on income or deductions are figured on the annualized income or deductions for each period.

(e)

Credits computed as a percentage of income must be based upon the annualized income for the period.

(f)

Credits that use income as a basis for determining an applicable percentage or for otherwise limiting the allowable credit must be based upon the total annualized income before allocation to the installment period.
Example 6: Richard and Terrie are married with no dependents. They had adjusted gross income of $14,000 for the period of January 1, 2013 to March 31, 2013. For the same period, they had itemized deductions of $2,810. For the period of January 1, 2013to May 31, 2013, they had adjusted gross income of $27,000 and itemized deductions of $4,300. For the period of January 1, 2013 to August 31, 2013, they had adjusted gross income of $41,000 and itemized deductions of $6,300. For the period January 1, 2013 to December 31, 2013, they had adjusted gross income of $69,000 and itemized deductions of $14,100. Their 2012 return showed tax after credits of $3,155. For purposes of computing the required installment, the following computations are necessary: Actual income from January 1 to March 31 x 4. Actual income from January 1 to May 31 x 2.4. Actual income from January 1 to August 31 x 1.5. Actual income from January 1 to December 31 x 1.0. First Estimated Tax Payment.[Table not included. See ED. NOTE.]

(g)

Pass-through entity (PTE) income may be annualized following the methodology provided under Internal Revenue Code (IRC) section 6654, Treasury Regulation section 1.6654-2 and all other related regulations and rules, if annualizing more accurately reflects the fluctuations in income to the shareholder from the entity. Solely for purposes of annualizing, the shareholder or partner may recognize the distributable share of income or loss from the PTE for the months in the PTE’s taxable year ending within the taxable year of the shareholder or partner that precede the month in which the estimated tax installment is due.
Example 7: Ed’s Catering, Inc. (ECI) is a calendar year S corporation that is in the catering business. ECI has limited business outside of the busy holiday party season. The majority of its business occurs in October, November, and December. In 2013, ECI’s income was $30,000 from January 1–March 31; $25,000 from April 1–June 30; $20,000 from July 1–September 30; and $450,000 October 1 to December 31. An ECI shareholder who receives most of his or her income during the last quarter in ECI’s tax year may choose to use the annualized income installment method for purposes of determining estimated tax payments.
Example 8: Wedding Planner’s, Inc. (WPI), an S corporation, has a fiscal year ending July 31st. The majority of its business occurs in May, June, and July. In fiscal year beginning 2012, WPI’s income was $30,000 from August 1, 2012–October 31, 2012; $25,000 from November 1, 2012–January 31, 2013; $20,000 from February 1, 2013–April 30, 2013; and $450,000 May 1, 2013 to July 31, 2013. The shareholder must include the income attributable to WPI as follows when determining the required installment for the shareholder’s calendar year 2013 using the annual method:
The 1st required installment is based on PTE income/loss from August 1st of the prior year to March 31st. Date payment is due is April 15th. The 2nd required installment is based on PTE income/loss from August 1st of the prior year to May 31st. Date payment is due is June 15th. The 3rd required installment is based on PTE income/loss from August 1st of the prior year to July 31st. Date payment is due is September 15th. The 4th required installment would already include the entire amount from the PTE received in the tax year of the shareholder but should not increase the underpayment for the 4th quarter since it was fully included by the third payment.
[ED. NOTE: Tables referenced are available from the agency.]
[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

Source: Rule 150-316-0493 — Required Installments for Estimated Tax, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-316-0493.

150‑316‑0006
Application of Capital Losses and Capital Loss Carryforwards 150‑316‑0007
Policy — Application of Various Provisions of the Federal Internal Revenue Code 150‑316‑0009
Policy — Application of Various Provisions of Tax Law to Domestic Partners 150‑316‑0015
Adoption of Federal Law 150‑316‑0020
Tax Reform Act of 1984 Adjustments 150‑316‑0025
Definition: “Resident” 150‑316‑0027
Status of Individuals in a Foreign Country 150‑316‑0035
Oregon Net Operating Losses — Treatment After 1984 150‑316‑0040
Administrative and Judicial Interpretations 150‑316‑0043
Qualified Business Income Reduced Tax Rate (QBIRTR) 150‑316‑0045
Taxable Income of Nonresidents and Part-year Residents 150‑316‑0050
Farm Capital Gain 150‑316‑0055
Transitional Provision to Prevent Doubling Income or Deductions 150‑316‑0060
Taxable Income of Resident 150‑316‑0065
Social Security and Railroad Retirement Benefits Eligible for Subtraction 150‑316‑0080
Credit for Income Taxes Paid to Another State 150‑316‑0082
Credit for Taxes Paid to Another State When Paid by a Pass-Through Entity 150‑316‑0084
Credit for Income Taxes Paid to Another State — Computation 150‑316‑0086
Credit for Income Taxes Paid to Other States — Proof Required and Procedure for Obtaining the Credit 150‑316‑0088
Addition of Taxes Paid to Another State Claimed as an Itemized Deduction 150‑316‑0090
Credit for Duplicative State Taxation Relating to Different Years 150‑316‑0115
Disabled Child Exemption Credit 150‑316‑0120
Credit for Political Contributions 150‑316‑0125
Credit for the Gain on the Sale of a Residence Taxed by Another State 150‑316‑0130
Credit for Installation of Alternative Energy Devices 150‑316‑0135
Proration of Income and Deductions for Nonresidents and Part-Year Residents 150‑316‑0145
Proration for Pass-through Entity Income of Part Year Oregon Residents 150‑316‑0150
Separate or Joint Federal Returns for Spouses in a Marriage 150‑316‑0155
Nonresident Partners: Guaranteed Payments 150‑316‑0157
Nonresident Partners: Other Methods of Allocation and Apportionment 150‑316‑0165
Gross Income of Nonresidents 150‑316‑0167
Gross Income of Nonresidents 150‑316‑0169
Gross Income of Nonresidents 150‑316‑0171
Gross Income of Nonresidents 150‑316‑0173
Gross Income of Nonresidents 150‑316‑0175
Gross Income of Nonresidents 150‑316‑0179
Student Loan Interest Deduction — for Part-Year and Nonresidents 150‑316‑0181
Moving Expense Deduction — for Part-year and Nonresidents 150‑316‑0183
Gross Income of Nonresidents 150‑316‑0185
Gross Income of Nonresidents: Waterway Workers 150‑316‑0195
Alimony Deduction — for Part-Year and Nonresidents 150‑316‑0197
Nonresident Deduction for Contributions to IRA, Keogh, or Qualified Medical Savings Accounts 150‑316‑0205
Credit for Taxes Paid to State of Residence 150‑316‑0225
Retirement Income Credit 150‑316‑0230
Subtraction for Previously Taxed Contributions 150‑316‑0234
“Withholding Statement” and “Exemption Certificate” 150‑316‑0235
Withholding: Basis of Amount Withheld 150‑316‑0237
Employees Exempt from Withholding 150‑316‑0239
Withholding on Fringe Benefits 150‑316‑0241
Independent Contractor Definition 150‑316‑0243
Personal Liability of Responsible Officers, Members, or Employees for Taxes Withheld 150‑316‑0250
Bonding Requirements for Delinquent Withholding Employers 150‑316‑0255
Withholding by Employers 150‑316‑0257
Employer’s Election of Method of Computing Withholding 150‑316‑0265
Withholding Payments: Cash Basis 150‑316‑0267
Additional Time to File Reports 150‑316‑0275
Treatment of Payroll Based Program Overpayments 150‑316‑0282
Exemptions for Military Personnel 150‑316‑0284
Penalty 150‑316‑0290
Procedure for Correcting the Filing of Withholding Certificates 150‑316‑0295
Credit for Tax Withheld 150‑316‑0297
Where Taxpayer Reports on Fiscal Year Basis 150‑316‑0305
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150‑316‑0307
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150‑316‑0315
Alternative Withholding Payment Method for Employers to Avoid Undue Burden 150‑316‑0320
Voluntary Withholding for Retired Members of the Uniformed Services 150‑316‑0325
Voluntary Withholding for Civil Service Annuitants 150‑316‑0330
Semiannual Reports and Payments 150‑316‑0332
Withholding: Payment Due Dates 150‑316‑0334
Withholding Tax Payment Requirements for Agricultural Employers 150‑316‑0336
Employee’s Rights 150‑316‑0345
Requirement to use Electronic Funds Transfer 150‑316‑0347
Electronic Funds Transfer. Payroll taxes and corporation estimated income and excise taxes not combined in determining mandate. Payments to be included. 150‑316‑0355
Withholding: Payment and Reports 150‑316‑0357
Waiver of Termination Reports 150‑316‑0359
Withholding: Annual Report by Employer 150‑316‑0361
Combined Reports and Statewide Transit Tax Reports: Agricultural Employers 150‑316‑0370
Liability for Unpaid Withholdings 150‑316‑0372
Officer Liability: Joint Determination of Liability Conference 150‑316‑0380
Withholding Penalties 150‑316‑0385
Nonresident Alternate Filing 150‑316‑0390
Deductions Allowed on Either the Inheritance Tax Return or the Fiduciary Income Tax Return 150‑316‑0395
Tax Treatment of Unincorporated Organization 150‑316‑0400
Resident and Nonresident Estates and Trusts 150‑316‑0402
Oregon Qualified Trust Tax Return 150‑316‑0410
Fiduciary Adjustment 150‑316‑0415
Accumulation Distribution Credit for Oregon Taxes Paid by Trust During Income Accumulation Years 150‑316‑0420
Taxable Income of Nonresident Estate or Trust 150‑316‑0425
Oregon Multiple Funeral Trust Tax Return 150‑316‑0427
Persons Required to Make Returns 150‑316‑0435
Petitioning Department to Equally Split Joint Liability 150‑316‑0440
Innocent Spouse, Separation of Liability, and Equitable Relief Provisions 150‑316‑0445
Liability of Fiduciaries 150‑316‑0450
Decedent’s Estate: Request for a Final Tax Determination 150‑316‑0452
Decedents’ Estate: Application for Discharge from Personal Liability for Tax on Decedent’s Income 150‑316‑0465
Estimated Tax 150‑316‑0470
Allocation of Joint Estimated Tax Payments 150‑316‑0475
Estimated Tax: Farmer’s and Fisher’s 150‑316‑0480
Estimated Tax: Application of Prior Year Overpayment (Refund) 150‑316‑0485
Tax Used to Compute Underpayment of Estimated Tax 150‑316‑0487
Estimated Tax: Underpayment Interest Not Imposed if There is a Casualty, Disaster or Other Unusual Circumstances 150‑316‑0489
Estimated Tax: Underpayment Interest Not Imposed If There Is Reasonable Cause 150‑316‑0491
Estimated Tax: Partnership and S Corporation Income of Part-year Residents and Nonresidents 150‑316‑0493
Required Installments for Estimated Tax 150‑316‑0495
Estimated Tax: Joint Return to Single or Separate Return 150‑316‑0497
Estimated Tax: Single or Separate Returns to Joint Return 150‑316‑0505
Oregon Lottery Winnings and Losses 150‑316‑0507
Modification of Federal Taxable Income: Interest and Dividends 150‑316‑0509
U.S. Government Obligations 150‑316‑0511
Addition for Original Issue Discount (OID) 150‑316‑0513
Modification of Federal Taxable Income: Adding Interest or Dividends of the United States Exempted by Federal Income Tax Law 150‑316‑0515
Modification of Federal Taxable Income: Adding Federal Estate Tax Attributable to Income in Respect of a Decedent Not Taxable by Oregon 150‑316‑0519
Gain or Loss Upon the Sale of State and Municipal Bonds of Other States (Foreign States) 150‑316‑0525
U.S. Government Interest in Retirement Accounts 150‑316‑0530
Pool of Assets that Qualify to Pay State Exempt-Interest Dividends 150‑316‑0535
Federal Tax Deduction: Accrual Method of Accounting Required 150‑316‑0537
Adjustment of Federal Tax Liability 150‑316‑0545
Election to Include Child’s Unearned Income — Addition Required 150‑316‑0550
Special Oregon Medical Subtraction 150‑316‑0555
Modification of Federal Taxable Income: Itemized vs. Standard Deduction 150‑316‑0557
Modification of Federal Taxable Income: Oregon Income Tax Claimed as an Itemized Deduction 150‑316‑0559
Modification of Federal Taxable Income: Previously Taxed Contributions to Pension or Annuity 150‑316‑0565
Basis of Depreciable Assets Moved into Oregon 150‑316‑0567
Property Subject to Accelerated Cost Recovery System 150‑316‑0569
Adjustment to Income for Basis Differences 150‑316‑0575
Amount Specially Taxed Under Federal Law to Be Included in Computation of State Taxable Income: Accumulation Distributions 150‑316‑0580
Definition for Severely Disabled Exemption 150‑316‑0585
Exemption for Blind and Severely Disabled 150‑316‑0590
Substantiation for Permanently Severely Disabled 150‑316‑0595
Exempt Income of Native Americans 150‑316‑0600
Oregon Investment Advantage Apportionable Income Exemption 150‑316‑0605
Military Pay Subtraction 150‑316‑0607
First-time Home Buyer Savings Account 150‑316‑0610
Road Construction Worker’s Travel Expenses 150‑316‑0615
Substantiation Required for Construction Worker and Loggers Expenses 150‑316‑0625
(Miscellaneous) Valuation of Forest Land or “Farm Use” Land for Oregon Inheritance Tax Purposes 150‑316‑0630
Scholarship Awards used for Housing Expenses 150‑316‑0635
Subtraction for Land Contributed to Educational Institutions 150‑316‑0640
Subtraction for Qualified Investment of Severance Pay 150‑316‑0650
Waiver of Frivolous Return Penalty Imposed Under ORS 316.992 150‑316‑0652
Frivolous Return Penalty
Last Updated

Jun. 8, 2021

Rule 150-316-0493’s source at or​.us