IRS penalties and interest: what an unpaid tax becomes
Enter the tax left unpaid, the year it belongs to and when the return went in. The result splits today's balance into tax, late filing penalty, late payment penalty and interest, then follows it month by month to the day you pay.
- Interest rate, fourth quarter of 2026
- 7 %
- Late filing penalty
- 5 % a month
- Late payment penalty
- 0.5 % a month
- Ceiling of each penalty
- 25 %
Balance on October 20, 2026
$7,919
$519 added to $7,400 of tax since April 15, 2026; interest now runs at about $2 a day.
| Unpaid tax | $7,400 |
| Failure to file penalty | $0 |
| Failure to pay penalty, 7 months | $259 |
| Interest, compounded daily | $260 |
Penalties of IRC 6651 and interest at each quarter's underpayment rate (7 % in the fourth quarter of 2026). Estimate, not tax advice.
| Month ending | Penalties | Interest | Balance |
|---|---|---|---|
| May 15, 2026 | $37 | $37 | $7,474 |
| June 15, 2026 | $74 | $75 | $7,549 |
| July 15, 2026 | $111 | $116 | $7,627 |
| August 15, 2026 | $148 | $161 | $7,709 |
| September 15, 2026 | $185 | $207 | $7,792 |
| October 15, 2026 | $222 | $253 | $7,875 |
| October 20, 2026 | $259 | $260 | $7,919 |
Compiled by Radif Partners · How we calculate · rules and rates read on irs.gov · not tax advice, the IRS decides
An unpaid federal income tax picks up three separate charges. The failure to file penalty is 5 % of the unpaid tax for each month or part of a month the return is late, and it stops growing after 5 months at 25 %. The failure to pay penalty is 0.5 % a month on the tax still unpaid, up to 25 %, which takes 50 months to reach. Interest runs on the tax and on the penalties at the underpayment rate of each quarter, 7 % in the fourth quarter of 2026, compounded every day and with no ceiling. Take $7,400 of 2025 tax that was due on April 15, 2026. If the return was filed on time, the balance on October 20, 2026 is $7,919. If the return is still not filed, it is $9,642, because the late filing penalty alone adds $1,665. Left another year with the return filed, the same debt reaches $8,952.
Three charges, three different clocks
The two penalties come from section 6651 of the Internal Revenue Code and work on months, not days. The failure to file penalty counts each month or part of a month from the due date, including any extension, to the day the return reaches the IRS. In a month where both penalties apply, the filing penalty is reduced by the payment penalty, so the combined charge is 5 %, not 5.5 %. A return filed more than 60 days late also triggers a minimum penalty of $525 for returns due in 2026, or the whole tax if that is less.
The failure to pay penalty counts from the payment due date, which an extension never moves. Interest, set by section 6621 at the federal short-term rate plus three points and compounded daily under section 6622, is the only charge that keeps going for as long as anything is owed. The table holds the tax at $7,400 and changes only the filing date.
| 2025 return | Late filing | Late payment | Interest | Balance on October 20, 2026 |
|---|---|---|---|---|
| Filed on time | $0 | $259 | $260 | $7,919 |
| Filed 25 days late | $333 | $259 | $272 | $8,264 |
| Filed 100 days late | $1,332 | $259 | $306 | $9,297 |
| Not filed yet | $1,665 | $259 | $318 | $9,642 |
Your tax and the filing date
Balance on October 20, 2026
$10,818
| Unpaid tax | $9,300 |
| Failure to file penalty, 2 months | $837 |
| Failure to pay penalty, 7 months | $326 |
| Interest, compounded daily | $356 |
Interest is charged on the penalties too
People often expect interest on the tax alone. The IRS interest page says otherwise: interest runs on any unpaid tax, penalty, addition to tax or earlier interest. The late filing penalty is treated as due on the return due date, so it bears interest from that day. The late payment penalty is due when the IRS sends a notice or assesses it; this calculator starts interest on each month of that penalty as it accrues, which can put the result a few dollars above the notice. Because each day's interest is added to the next day's base, a balance growing at 7 % a year grows slightly faster than 7 % would suggest.
On the filed-on-time version of the example, interest now adds about $1.52 a day. That figure moves up as the penalties grow and down with every payment, since payments go to the tax first and the penalty is figured on unpaid tax only.
What waiting costs, month by month
Postponing the payment changes two lines: the late payment penalty, until it reaches its ceiling, and the interest, which never does. The filing penalty is fixed once the return is in. Here is the same $7,400, return filed on time, paid on different dates.
| Paid | Late payment penalty | Interest | Total due |
|---|---|---|---|
| Today (October 20, 2026) | $259 | $260 | $7,919 |
| In 3 months | $370 | $402 | $8,172 |
| In 6 months | $481 | $545 | $8,426 |
| In 12 months | $703 | $849 | $8,952 |
| In 24 months | $1,147 | $1,514 | $10,061 |
Rates for future quarters are not known yet, so the calculator carries the last published rate forward and says so under the result. The IRS posts each new quarter on its quarterly interest rates page, and a new rate applies to the whole unpaid balance from the first day of its quarter.
An older year carries its own rate history
A balance from an earlier year has lived through rates that a 2025 balance never saw. The same $7,400 for tax year 2023, due April 15, 2024 and filed on time, crossed quarters at 8 %, then 7 %, then 6 % in the second quarter of 2026. On October 20, 2026 it stands at $10,118, with the late payment penalty already at $1,147 and interest at $1,571. Choosing the tax year in the calculator applies the right due date and the right sequence of rates.
Reading the result next to an IRS notice
A notice is computed to the date printed on it, and it includes payments, credits and refunds the IRS has already applied. Small gaps between the notice and this page usually come from the start date of interest on the late payment penalty, a payment credited on a different day, or a disaster postponement of the due date in your county, which this tool does not model. Large gaps usually mean a different tax figure: an amended return, a CP2000 adjustment or a substitute return prepared by the IRS.
The penalties can sometimes be removed, and their interest goes with them; the interest on the tax itself cannot be waived for reasonable cause. The first-time abatement page and the penalty abatement page explain who qualifies. The figures here are an estimate for planning, not tax advice: the amount you owe is the one the IRS assesses, and only the IRS can change it.