IRS late filing penalties in 2026: how they work
Arielle ContrerasArielle is a freelance writer who’s covered a range of topics including publishing, public transit accessibility, and freelance taxes. Her work has appeared in Electric Literature and She Writes and has been featured in Capital Currents. Arielle spends her free time on nature trails, thinking about what she’s going to cook for dinner and what she’ll write next.
Krislyn ChanKrislyn is Chief Growth Officer at Keeper. At Keeper, she strives to make expert-level tax strategies that used to require a traditional CPA accessible to all. Prior to Keeper, she was at Curology, where she helped bring custom, prescription-grade skincare out of the dermatologist's office to millions of faces.
Key takeaways
- File even if you can’t pay. The late-filing penalty is 5% of your unpaid tax a month, ten times the 0.5% late-payment penalty.
- Each penalty normally tops out at 25% of your unpaid tax, so together they can reach 47.5%, plus interest.
- If your 2025 return is more than 60 days late, the late-filing penalty is at least $525 or 100% of the tax you owe, whichever is less.
- Interest is 7% a year for the fourth quarter of 2026, compounded daily on your unpaid tax, and on penalties too.
- If you’re owed a refund, there’s no penalty, but you have to file within three years to claim it. Catch up with Keeper.
How the late filing penalty calculator works
The calculator estimates the tax you owe from your income, then adds federal and state penalties and interest for the months since your taxes were due.
| Input | What to enter |
|---|---|
| Months since taxes were due | Count each month or part of a month since the deadline. A return due April 15 and filed August 10 is 4 months late. |
| Extension | Whether you filed an extension by the deadline. If you file by October 15, it removes the late-filing penalty, but not the late-payment penalty or interest. |
| State and filing status | Your state and your filing status: single, married filing jointly, or head of household. Married filing separately isn’t supported. |
| W-2 and 1099 income | Your wages, and your freelance or business profit after expenses. If married filing jointly, enter combined totals. |
It assumes your W-2 withholding covered the tax on your wages and that you made no estimated payments on your 1099 income. If you paid some tax already, your penalties will be lower.
Let’s see an example
Say you owe $5,000 in federal tax and file and pay 4 months after the April deadline. Here’s what it costs, with and without an extension:
| No extension | Filed an extension | |
|---|---|---|
| Late-filing penalty | $900 | $0 |
| Late-payment penalty | $100 | $100 |
| Interest | $118 | $118 |
| Total | $1,118 | $218 |
The late-filing penalty is 4.5% a month here, because it’s reduced by the 0.5% late-payment penalty in months when both apply. Filing an extension would have saved $900. Interest is approximate and also applies to penalties once they’re assessed.
Self-employed? Why filing late usually costs more
Penalties are a percentage of the tax you still owe when you file. W-2 employees have tax withheld from every paycheck, so many have nothing left to pay, or a refund coming, and owe no penalty even if they file late. If you’re self-employed, no one withholds for you. Unless you paid quarterly estimates, you owe your whole year’s income tax plus 15.3% self-employment tax when you file.
For example, a single filer in Texas with $50,000 of 1099 profit owes about $9,732 in federal tax. Filing and paying 3 months late adds about $1,631 in penalties and interest. With the same income on a W-2 and enough withheld, the penalty would be $0.
- File on time, even if you can’t pay. The late-filing penalty is the big one. File or get an extension by April 15, and pay what you can with it.
- Watch for a third penalty. Skipping quarterly estimated payments can trigger an underpayment penalty, even if you file on time. Check yours with our estimated tax penalty calculator.
- Lower the balance. Every penalty is a percentage of what you owe, so business write-offs that cut your tax also cut your penalties.
How IRS penalties and interest are calculated
Failure-to-file penalty
5% of your unpaid tax for each month or part of a month your return is late, up to 25%. In months when you also owe the late-payment penalty, it’s reduced to 4.5%, so it maxes out at 22.5% after five months. If your return is more than 60 days late, the minimum penalty is $525 or 100% of your tax, whichever is less, for returns due in 2026. For returns due in 2027, it rises to $535.
Failure-to-pay penalty
0.5% of your unpaid tax for each month or part of a month it stays unpaid, up to 25%. It drops to 0.25% a month during an approved payment plan if you filed on time, and rises to 1% a month if you don’t pay within 10 days of an IRS notice of intent to levy.
Interest
The IRS charges interest on unpaid tax from the due date until you pay, and on most penalties too. The rate is the federal short-term rate plus 3%, set every quarter, and it’s 7% for the fourth quarter of 2026. It compounds daily.
State penalties
Most states charge their own late-filing and late-payment penalties and interest on unpaid state tax. The calculator estimates them, but check your state’s tax agency for exact rules.
When you won’t owe a late-filing penalty
- You’re owed a refund. Penalties are based on the tax you owe, so there’s none if you’re due money back.
- You filed an extension and file by October 15. If you file after October 15, the late-filing penalty starts from then. An extension doesn’t extend the time to pay, so the late-payment penalty and interest still apply. Here’s how to file one.
- You live and work outside the US. You get an automatic two-month extension to file, to June 15, though interest still runs on unpaid tax. More on taxes abroad.
- You serve in a combat zone. You generally have at least 180 days after leaving to file and pay.
Track and claim every eligible deduction with Keeper
Keeper scans your accounts for write-offs and files your return — with tax pros reviewing every one.
Try it freeHow to lower or remove your penalties
- File as soon as you can. The late-filing penalty grows every month until it hits its cap, and it’s the bigger of the two.
- Pay what you can now. Penalties and interest are based on what’s still unpaid.
- Ask for first-time penalty abatement. If you filed on time and had no penalties for the past three years, the IRS will usually remove a late-filing or late-payment penalty. You’ll generally need to have filed your current returns and paid or set up a plan for what you owe. Interest on the removed penalties goes away too.
- Claim reasonable cause. Penalties can be removed if something outside your control, like a serious illness or a disaster, kept you from filing or paying.
- Set up a payment plan. Plans of up to 180 days have no setup fee. Longer plans cost $29 to $178 to set up, with fees waived or reduced for lower incomes. Interest keeps adding up until you pay in full.
Catching up on years of unfiled taxes
Gather your W-2s, 1099s, and other tax forms for each missing year. If you can’t find them, you can request a wage and income transcript from the IRS. If you’re owed refunds, you generally have three years from each original due date to claim them, so start with the oldest year that’s still in that window. Tax year 2023 refunds must be claimed by April 15, 2027. The IRS usually asks people catching up to file the last six years.
Keeper can help you file past-due returns from the last five years, with a CPA or enrolled agent walking you through your penalties and options. Read what happens if you miss the tax deadline for more.
Avoid penalties next year
- Your 2026 return is due April 15, 2027, or October 15, 2027, with an extension. See all the tax deadlines.
- If you expect to owe $1,000 or more when you file, which is common if you’re self-employed, pay quarterly estimated taxes. Our quarterly tax calculator shows how much.
- Not sure what you’ll owe? Estimate it early with our income tax calculator.
9 sources
- Failure to file penalty · irs.gov
- Failure to pay penalty · irs.gov
- Rev. Proc. 2025-32: 2026 inflation adjustments (minimum failure-to-file penalty for 2027 returns) · irs.gov
- Interest rates remain the same for the fourth quarter of 2026 · irs.gov
- Penalty relief due to first-time abate or other administrative waiver · irs.gov
- Payment plans and installment agreements · irs.gov
- Time you can claim a credit or refund · irs.gov
- Get an extension to file your tax return · irs.gov
- Topic no. 653, IRS notices and bills, penalties and interest charges · irs.gov
This article is for informational purposes only and isn’t tax, legal, or financial advice. Tax rules change and depend on your situation, so talk to a tax professional about yours.
