IRS penalty and interest calculator.

What the calculator adds up

When you owe tax and do not pay on time, three charges can apply, and they use different rules. The page models each one separately so you can see where the money goes.

Failure-to-file penalty. If you file late, the penalty is 5% of the unpaid tax for each month or part of a month, up to 25%. In months when the failure-to-pay penalty also runs, the filing penalty is reduced by 0.5%, so it is 4.5% a month and the two together equal 5%. For a return more than 60 days late there is a minimum: the lesser of a set dollar amount or 100% of the tax. That amount depends on the due date; for returns due after December 31, 2025 it is $525. The table in the sources lists earlier years ($510 for 2025, $485 for 2024, $450 for 2023, $435 for 2020 to 2022).

Failure-to-pay penalty. It is 0.5% of the unpaid tax for each month or part of a month, up to 25% (50 months). A part month counts as a full month. An extension to file does not extend the time to pay, so this penalty starts on the original due date.

Interest. Interest runs on the unpaid tax from the original due date until you pay, at the IRS underpayment rate for each quarter, compounded daily. The rate is the federal short-term rate plus 3 percentage points, rounded to a whole percent, and reset every quarter. Interest also runs on the failure-to-file penalty, from the filing deadline including extensions. The tool uses a dated rate table so a balance that straddles quarters gets the right rate for each day.

Why you see 6% in some places and 7% in others

The conflict is real, but it is a matter of dates, not a mistake. The IRS underpayment rate was 7% in each quarter of 2025, then 7% in Q1 2026, 6% in Q2 2026 (Rev. Rul. 2026-5), 7% in Q3 2026 and 7% for Q4 2026 (Rev. Rul. 2026-15). A page that says 6% is quoting April to June 2026; a page that says 7% is quoting one of the other quarters. Because the rate changes by quarter, this calculator never asks for one rate. It looks up the rate for each day. See the full table on the IRS interest rates by quarter page.

Worked examples (hypothetical amounts, real rules)

Late filer, late payer. You owed $10,000 on April 15, 2026, filed on October 15 without an extension and paid on December 15. The tool counts 8 months of failure-to-pay penalty ($400.00) and 5 months of filing penalty at 4.5% ($2,250.00). Interest on the tax comes to about $456.94 and interest on the filing penalty to about $102.81. The total comes to $13,209.75, or $3,209.75 on top of the tax.

On-time filer, late payer. You filed on April 15 but could not pay $8,000 until October 20. Only the 0.5% penalty applies: 7 months, $280.00. Interest comes to about $276.20, and the total owed is $8,556.20. Filing on time is why the penalty is so much smaller than in the first case.

The minimum penalty in action. With only $300 of tax, filed and paid September 1, the percentage penalty is small but the return was more than 60 days late, so the tool applies the minimum: the lesser of $525 or the whole $300, which gives $300.00.

Edge cases and mistakes

• Extension is not a payment extension. Form 4868 gives you until October to file, not to pay.
• Penalties after a levy notice. The failure-to-pay penalty becomes 1% a month starting 10 days after a notice of intent to levy. This tool does not model it.
• Estimated-tax penalty. The penalty for underpaying quarterly estimates is a separate calculation under section 6654 and is not included.
• Interest on the failure-to-pay penalty generally starts only after the IRS bills you, so the tool leaves it out. Your real total may be a little higher.
• Day counting. The tool divides each quarterly annual rate by 365 or 366 and compounds daily. That is our modelling assumption; the IRS runs its own software, so cents can differ.
• You may not owe the penalty. The IRS can remove failure-to-file and failure-to-pay penalties for reasonable cause, and interest on a removed penalty is removed too.

Who this is for, and what it does not cover

It suits individuals and small businesses estimating what a late federal income tax payment costs. It does not cover payroll tax penalties, accuracy-related penalties, fraud, state penalties, or interest on a return you have not filed. The result is an estimate, not an IRS balance.

FAQ

How is the IRS late filing penalty calculated?

It is 5% of the unpaid tax for each month or part of a month the return is late, capped at 25%. When the late-payment penalty also applies, the filing penalty is reduced by 0.5% a month, so it is 4.5%. A return more than 60 days late has a minimum penalty, $525 for returns due after December 31, 2025, or 100% of the tax if that is less.

How is the IRS late payment penalty calculated?

It is 0.5% of the unpaid tax for each month or part of a month, up to 25%. The rate falls to 0.25% during an approved payment plan for on-time individual filers, and rises to 1% starting 10 days after a notice of intent to levy.

What is the IRS interest rate in 2026?

The underpayment rate was 7% in Q1, 6% in Q2, 7% in Q3 and 7% in Q4 2026. It is the federal short-term rate plus 3 percentage points, reset each quarter and compounded daily.

Why do some sites say the IRS rate is 6% and others 7%?

They quote different quarters. The rate dropped to 6% for April to June 2026 (Rev. Rul. 2026-5) and returned to 7% on July 1. Use the rate for the dates your balance was open, which is what this calculator does.

Does interest accrue on penalties?

Yes. Interest runs on the failure-to-file penalty from the filing deadline, including extensions. Interest on most other penalties starts only if you do not pay within 21 calendar days of a notice (10 business days for $100,000 or more).

Does an extension stop the late payment penalty?

No. An extension gives you more time to file, not to pay. The failure-to-pay penalty and interest start on the original due date. An extension can, however, move the date from which the failure-to-file penalty is counted.

Can I get IRS penalties removed?

Possibly. The IRS can remove failure-to-file and failure-to-pay penalties for reasonable cause, such as a disaster, serious illness, or being unable to get records. Lack of funds or relying on a preparer generally does not qualify alone. If a penalty is removed, the interest on it is removed too.

Sources

Retrieved 2026-10. Each link was opened and checked against the claim next to it.

• IRS: Failure to file penalty: 5% a month, 25% cap, minimum penalty amounts by year, the reduction by the failure-to-pay penalty.
• IRS: Failure to pay penalty: 0.5% a month, 0.25% during a plan, 1% after a levy notice, 25% cap.
• IRS: Quarterly interest rates: the underpayment rate for each quarter, 2017 to 2026.
• 26 U.S.C. 6651: penalty rates, the 4.5% overlap, minimum penalty, reasonable cause.
• 26 U.S.C. 6601: interest from the due date, interest on the failure-to-file addition.
• 26 U.S.C. 6621: underpayment rate is the federal short-term rate plus 3 points, rounded, set quarterly.
• 26 U.S.C. 6622: interest compounded daily.
• Internal Revenue Bulletin 2026-36 (Rev. Rul. 2026-15): 7% for the quarter beginning October 1, 2026.
• Internal Revenue Bulletin 2026-8 (Rev. Rul. 2026-5): 6% for the quarter beginning April 1, 2026.
• IRS: Penalty relief due to reasonable cause: which penalties may be removed and what qualifies.