Bill > HR990

This bill, known as the SAFE Act (Simplify Automatic Filing Extensions Act), introduces a new provision to the Internal Revenue Code that provides relief for individual taxpayers regarding potential penalties for failing to pay income tax. Specifically, the bill allows individuals to avoid penalties if they timely pay 125 percent of their income tax liability from the previous year. To qualify for this penalty exemption, taxpayers must file their tax return on time and pay the specified amount by the tax payment deadline. The provision does not apply in certain circumstances, such as when the taxpayer did not file a tax return in the previous year, the previous year's tax year was less than 12 months long, or for joint returns with special filing conditions. For joint returns, the bill provides detailed guidelines on how tax amounts are calculated and considered. The penalty exemption is only valid if additional payments are made with the timely filed return, and the new rules will take effect for taxable years beginning after December 31, 2024. This legislation aims to provide more flexibility and reduce potential financial penalties for taxpayers who make good-faith efforts to meet their tax obligations.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/990/all-info