The Oregon Department of Revenue may assess penalties and interest if you do not file your Oregon income tax return by the due date, do not pay the tax you owe on time, or fail to make required estimated tax payments. Filing an extension gives you additional time to file your return, but it does not extend the time to pay your tax.
Failure to Pay Penalty
If you do not pay the tax shown on your Oregon return by the original due date, the Oregon Department of Revenue may assess a 5% late payment penalty on the unpaid tax.
You won’t be charged the 5 percent failure-to-pay penalty if you do all of the following:
- File federal Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or send us a payment according to the instructions in Publication OR-40-EXT;
- Pay at least 90 percent of your tax after credits by the original due date;
- File your return within the extension period;
- Pay the balance of tax due when you file your return; and
- Pay the interest on the balance of tax due when you file your return or within 30 days of the date of the bill you receive from us.
If you file with a valid extension but didn’t pay 90 percent of your tax by the original due date, you will be charged the 5 percent failure-to-pay penalty.
Failure to File Penalty: If your Oregon return is filed more than three months after the due date, including extensions, an additional 20% late filing penalty may be assessed on tax that was not paid by the original due date.
You won’t be charged the 20 percent failure-to-file penalty if you:
• File federal Form 4868 (the automatic extension of time to file); or
• Make a payment according to the instructions in Publication OR-40-EXT, and
• File the return within three months after the due date (including extensions).
Fraud:
If the Oregon Department of Revenue determines that any part of a tax deficiency is due to fraud with the intent to evade tax,
- a fraud penalty of up to 100% of the deficiency may be assessed
- you could be charged with tax evasion, a class C felony
- You could be fined up to $125,000, serve a jail sentence, or both
100% Penalties
A separate 100% penalty may apply if Oregon returns are not filed for three consecutive years by the due date of the third year. This penalty is separate from the fraud-related penalty and does not require a finding of fraud.
Interest on Unpaid Tax
- Interest is charged on any unpaid Oregon tax beginning on the original due date of the return and continues until the tax is paid in full.
- The Oregon Department of Revenue establishes the interest rate annually as provided by Oregon law.
- If a tax deficiency remains unpaid 60 days after a Notice of Assessment becomes final, the applicable interest rate increases by 4 percentage points until the liability is paid.
Estimated Tax Underpayment
- Taxpayers who are required to make Oregon estimated tax payments may be subject to an underpayment interest charge if sufficient tax is not paid throughout the year through withholding and estimated tax payments.
- The underpayment interest is generally calculated using Form OR-10, Underpayment of Estimated Tax by Individuals, Fiduciaries, and Trusts.
Penalty Relief
- The Oregon Department of Revenue may waive certain penalties if you can show that the failure to file or pay on time was due to reasonable cause and not willful neglect.
- A request for penalty relief should include an explanation of the circumstances and any supporting documentation. Interest is generally required by law and is not waived except as permitted by Oregon law.
Important Notes
- An extension of time to file is not an extension of time to pay.
- Paying at least 90% of your Oregon tax liability by the original due date may help you avoid the 5% late payment penalty if you qualify for an extension.
- Interest continues to accrue on any unpaid tax until the balance is paid in full.
- Penalties and interest are in addition to the tax owed.
Your 2025 return must be filed by April 15, 2026. If you requested an extension, your return must be filed by October 15, 2026. Your 2025 tax must be paid by April 15, 2026, even if you requested an extension to file your return.
Source:
Publication OR-17
Disclaimer: Always verify tax information with official forms and instructions from the Oregon Department of Revenue or IRS. For specific questions about penalties and interest, consult the Oregon Department of Revenue’s official website or a qualified tax professional.