H.R. 990, the Simplify Automatic Filing Extensions Act, modifies federal income tax penalty rules for individuals. Under current law, taxpayers face penalties if they fail to pay their income taxes on time. This bill allows individuals to avoid that penalty if they pay 125 percent of their prior year's tax liability by the payment deadline, essentially letting them estimate their current year taxes based on what they owed the year before. The provision applies to tax years beginning after December 31, 2024, and includes several conditions: the taxpayer must still file their return on time, must have filed a return the prior year, and the prior year must have been a full 12 months. The bill was introduced in February 2025 and referred to the House Ways and Means Committee but includes no new federal funding, as it only modifies penalty assessment procedures.
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