IRS Penalty and Interest Calculator

Calculate your penalties and interest

Enter the unpaid tax from your return, the original due date, and the dates you filed and paid (or plan to). Leave the filed or paid date blank if it has not happened yet, and the estimate runs to today. Add a payment plan or levy notice date if you have one. Nothing you type is sent or saved.

For your exact figures, your IRS Online Account and account transcripts show every penalty and interest charge the IRS has assessed.

How the calculation works

Failure-to-file penalty

The penalty is 5% of the unpaid tax for each month or part of a month the return is late, up to 25%. It starts after the filing deadline, including any extension. Unpaid tax means the tax on the return minus withholding, estimated payments and refundable credits paid on time. One day late counts as a full month.

If the return is more than 60 days late, the penalty is at least the lesser of $525 or 100% of the unpaid tax. That minimum applies to Forms 1040 and 1120 due in 2026; the IRS publishes lower amounts for earlier years on its failure-to-file page.

Failure-to-pay penalty

The penalty is 0.5% (IRS.gov, 2026) of the unpaid tax for each month or part of a month after the original due date, up to 25%. An extension to file does not extend the time to pay. Two things change the monthly rate:

• Approved payment plan: 0.25% (IRS.gov, 2026) a month while the plan is in effect, if you are an individual who filed on time.
• Notice of intent to levy: 1% (IRS.gov, 2026) a month if the tax is not paid within 10 days (IRS.gov, 2026) of the notice.

The same-month offset

When both penalties apply in the same month, the failure-to-file penalty is reduced by that month’s failure-to-pay penalty. In the IRS’s own illustration, instead of a 5% failure-to-file penalty for the month, the IRS charges 4.5% for filing late and 0.5% for paying late. After five months the failure-to-file penalty stops at 22.5% of the tax, while the failure-to-pay penalty keeps running until it reaches its own cap. In most cases the two penalties together top out at 47.5% of the unpaid tax. The offset cannot push the penalty below the minimum for returns more than 60 days late.

Interest

Interest is the federal short-term rate plus 3 percentage points, reset quarterly and compounded daily (IR-2026-98 (IRS.gov, Q4 2026)). The calculator applies each day’s rate to the balance: balance x (1 + annual rate / 365) for every day, using 366 in a leap year. Interest on the tax runs from the original due date. Interest on the failure-to-file penalty runs from the filing deadline, including extensions. Interest on the failure-to-pay penalty starts only after the IRS sends a notice and demand, so it is not included.

For days before 2026 or after 2026, the calculator uses the current rate and shows a caveat, because it only carries the 2026 quarterly table. The IRS quarterly interest rates page lists earlier years.

Worked example with assumed figures

Example (assumed figures). A single filer owes $8,000 on a 2025 Form 1040 due April 15, 2026, with no extension. The figures below come from the calculator.

Paying three months later but filing on time cost about $1,585 less in this example. That gap is the whole case for filing by the deadline, or requesting an extension, even when you cannot pay. If this filer had penalty-free returns for the three prior years, the Automatic Exemption from Penalty would mean neither penalty is assessed, leaving only the interest on the tax.

When penalty relief may remove the penalties

Both AEP and the older First Time Abate need a clean compliance history: the same type of return filed on time for the prior 3 years (IRS.gov, 2026), and no penalties in that period other than an estimated tax penalty (or penalties removed for reasonable cause or IRS error). The calculator asks about your history and flags when relief may apply:

When a penalty is removed, the IRS automatically removes the interest charged on it. Interest on the tax itself is not removed for reasonable cause or first-time relief; it can be reduced only for an unreasonable IRS error or delay. See penalty relief options and how the automatic exemption works.

Assumptions and last updated

Last updated: 29 September 2026. Penalty rates, caps, the minimum penalty and the 2026 quarterly interest rates come from our figures registry, checked against IRS.gov. We review interest rates every quarter and penalty amounts every January.

• It estimates income tax on Form 1040. Partnership, S corporation and payroll returns use different penalty rules.
• It assumes one full payment on the paid date. Partial payments reduce the base for later months, so real penalties would be lower.
• It counts months the way the IRS does: each month or part of a month after the deadline is a full month.
• If a payment plan and a levy notice both apply, it uses the higher levy-notice rate for the months after the notice window.
• It leaves out estimated tax, accuracy-related and fraud penalties, and interest on the failure-to-pay penalty.
• It is not an IRS bill. It runs in your browser, and nothing you enter is sent or saved.

What to do with your result

1. File now if you have not. Filing stops the larger failure-to-file penalty from growing, even if you cannot pay anything yet.
2. Pay what you can. Every payment reduces the base for later failure-to-pay penalties and interest.
3. Set up a payment plan for the rest. If you filed on time, the failure-to-pay rate drops to 0.25% while the plan is in effect. Individuals can apply with the IRS Online Payment Agreement; see payment plan options and the payment plan calculator.
4. Ask about penalty relief. Check whether AEP was applied, or request First Time Abate or reasonable cause relief.
5. If you cannot pay in full at all, look at an offer in compromise or currently not collectible status, and confirm you meet the Fresh Start qualifications.

Most people can request First Time Abate with one phone call. A professional is worth considering when several years are unfiled, a levy notice has arrived, or reasonable cause needs documenting. The Taxpayer Advocate Service and Low Income Taxpayer Clinics help for free.

Frequently asked questions

Keep reading in the Fresh Start hub

• Penalty relief under Fresh StartFirst Time Abate, reasonable cause and the new automatic exemption.
• Automatic Exemption from PenaltyWho gets penalties waived without asking, from 2026.
• Form 843 step by stepRequesting penalty abatement in writing.
• Payment plan calculatorEstimate a monthly payment on your balance.
• Fresh Start key figures for 2026Every rate, fee and threshold with its IRS source.