Bill Details
HR.990 - 119th Congress
Status
Latest action
2025-02-05 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-02-05
Policy Area
Taxation
Committees
View committees (1)
Sponsors
Cosponsors
View cosponsors (1)
8
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AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would change the tax rules for some individuals so they can avoid an underpayment penalty if they pay enough tax during the year based on last year’s tax bill. In general, a person would not owe the penalty for not paying enough income tax during the year if they pay at least 125% of the tax they owed for the previous year by the deadline for paying this year’s tax. The bill is meant to make tax payment rules simpler for people whose income is fairly steady from year to year, but it would still require them to file their tax return on time and make any extra payments that are due.
- The penalty relief would apply only if the person files the current year’s tax return on time, including any filing extension.
- The rule would not apply if the person did not file a tax return for the previous year, or if the previous year was less than 12 months long.
- For married couples filing jointly, the bill includes special rules for how to measure the prior year’s tax amount, depending on whether the couple files jointly in both years.
- The changes would apply to tax years starting after December 31, 2024.
Official Summaries
No summaries available
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 990 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 990
To amend the Internal Revenue Code of 1986 to allow individuals to
avoid a penalty for failure to pay income tax by timely paying 125
percent of the income tax liability for the prior year.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 5, 2025
Ms. Chu (for herself and Mr. Carey) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow individuals to
avoid a penalty for failure to pay income tax by timely paying 125
percent of the income tax liability for the prior year.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Simplify Automatic Filing Extensions
Act'' or the ``SAFE Act''.
SEC. 2. NO PENALTY FOR FAILURE TO PAY INCOME TAX FOR INDIVIDUALS WHO
TIMELY PAY 125 PERCENT OF INCOME TAX LIABILITY FOR PRIOR
YEAR.
(a) In General.--Section 6651(c) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(3) No penalty for failure to pay income tax for
individuals who timely pay 125 percent of income tax liability
for prior year.--
``(A) In general.--Subsection (a)(2) shall not
apply with respect to an income tax return of an
individual if such individual pays, on or before the
date prescribed for the payment of the tax with respect
to which such return relates (determined with regard to
any extension of time for payment), 125 percent of the
amount of tax required to be shown on the income tax
return of such individual for the immediately preceding
taxable year.
``(B) Failure to file; short taxable years.--
Subparagraph (A) shall not apply--
``(i) if the individual does not file an
income tax return for the taxable year
described in subparagraph (A) on or before the
date prescribed therefor (determined with
regard to any extension of time for filing),
``(ii) if the individual did not file an
income tax return for the immediately preceding
taxable year referred to in subparagraph (A),
or
``(iii) if the immediately preceding
taxable year referred to in subparagraph (A)
was less than 12 months.
``(C) Joint returns.--In the case of a joint
return, if the taxpayer did not file a joint return for
the immediately preceding taxable year referred to in
subparagraph (A), the amounts required to be shown on
the income tax returns of both spouses for such
immediately preceding taxable year shall be taken into
account under subparagraph (A). Except as otherwise
provided by the Secretary, if the individual does not
file a joint return for the taxable year to which
subparagraph (A) applies and filed a joint return for
the immediately preceding taxable year, the entire
amount of tax required to be shown on such joint return
shall be taken into account under subparagraph (A).
``(D) Exception not applicable unless additional
payments are made with timely filed return.--
Subparagraph (A) shall not apply with respect to any
period beginning after the earlier of--
``(i) the date prescribed for filing the
income tax return for the taxable year
(including extensions thereof), or
``(ii) the date on which such return was
filed.''.
(b) Conforming Amendment.--The heading of section 6651(c) of such
Code is amended by striking ``Rule'' and inserting ``Rules''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
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