42-1121. Overpayment and underpayment in
different tax years
A. If an overpayment is made by a taxpayer for any taxable period and a deficiency
is owing from the same taxpayer for any other taxable period, the overpayment, if the
period within which credit for the overpayment may be allowed has not expired, shall be
credited on the deficiency if the period within which assessment of the deficiency may be
proposed has not expired, and the balance, if any, shall be credited or refunded to the
taxpayer. Interest shall not be assessed on the portion of the deficiency that is
extinguished by the credit or added to such portion of the overpayment as is applied
against the deficiency for the period of time after the date the overpayment was
made. For the purposes of this section, the returns of a decedent and his estate shall
be considered returns of the same taxpayer and the returns of the decedent and his estate
filed for the year of death shall be considered returns for different taxable years.
B. If the correction of an erroneous inclusion or deduction of an item in the
computation of income of any year results in an overpayment of income taxes for one year
and a deficiency for another year, the overpayment, if the period within which credit for
the overpayment may be allowed has not expired, shall be credited on the deficiency, if
the period within which the deficiency may be proposed has not expired, and the balance,
if any, shall be credited or refunded and in any case described by this section no
interest may be assessed on the portion of the deficiency that is extinguished by the
credit or added to such portion of the overpayment as is applied against the deficiency
for the period of time after the date the overpayment was made.
C. This section is not intended, nor shall it be construed, as a limitation on the
department's duty to offset or recoup barred assessments against overpayments.
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