IRS Penalty and Interest Calculator
Created by: Emma Collins
Last updated:
Estimate IRS late filing and late payment penalties and daily compounded interest on unpaid tax, using the IRS quarterly interest rates through 2026.
IRS Penalty and Interest Calculator
FinanceEstimate late filing and late payment penalties plus daily compounded IRS interest on a balance due.
Balance due on the return
IRS penalties and interest at a glance
| Charge | Rate | Maximum |
|---|---|---|
| Failure to file | 5% of unpaid tax per month or part month | 25% (22.5% when the payment penalty also applies) |
| Minimum if over 60 days late | $525 for returns due in 2026 or later | Never more than the tax owed |
| Failure to pay | 0.5% per month or part month (0.25% on a payment plan) | 25% |
| Interest | Federal short-term rate + 3%, compounded daily | No cap |
Example: $5,000 owed, paid August 1, 2026
Filing and paying on August 1 instead of April 15 makes the return 4 months (or parts of months) late. The late filing penalty is $900, the late payment penalty $100 and interest about $111, for a total of $6,111.
With an extension filed by April 15, there is no late filing penalty, and the bill falls to $5,194.
IRS underpayment interest rates
| Year | Jan–Mar | Apr–Jun | Jul–Sep | Oct–Dec |
|---|---|---|---|---|
| 2026 | 7% | 6% | 7% | 7% |
| 2025 | 7% | 7% | 7% | 7% |
| 2024 | 8% | 8% | 8% | 8% |
Dates after December 31, 2026 use 7% until the IRS announces new rates.
Avoiding a bigger bill
File on time even if you cannot pay: the filing penalty is ten times the payment penalty. Paying what you can by the deadline reduces both the payment penalty and the interest. To stop it happening again, check your withholding with the W-4 withholding calculator or plan payments with the quarterly estimated tax calculator.
Frequently asked questions
How much is the IRS late filing penalty?
5% of the unpaid tax for each month or part of a month the return is late, up to 25%. If you also owe the late payment penalty for the same month, the filing penalty is reduced by that amount. Returns more than 60 days late face a minimum penalty of $525 or 100% of the tax owed, whichever is less.
How much is the late payment penalty?
0.5% of the unpaid tax for each month or part of a month, up to 25%. It drops to 0.25% a month while you are on an IRS payment plan, if you filed on time, and rises to 1% a month after a notice of intent to levy.
What interest rate does the IRS charge?
The federal short-term rate plus 3 percentage points, reset each quarter and compounded daily. It is 7% for the fourth quarter of 2026. Interest runs on unpaid tax from the original due date until you pay, and on penalties too.
Does an extension stop penalties?
An extension avoids the late filing penalty until October, but not the late payment penalty or interest. In the example below, filing an extension cuts the cost from $1,111 to $194.
Can penalties be removed?
You can ask for first-time abatement if you had no penalties in the previous three years and have filed and paid (or arranged to pay) what you owe, or for reasonable cause such as serious illness or a disaster. Interest is generally not removed unless the penalty it relates to is.