If you file late, the IRS charges a failure-to-file penalty of 5% of unpaid tax per month, up to 25%, plus interest. File even if you can’t pay in full.
Penalties
The IRS charges two separate penalties:
- Failure to file: 5 percent of the unpaid tax for each month or part of a month the return is late, up to 25 percent. The minimum for returns over 60 days late is the lesser of $450 (2024 figure) or 100 percent of the tax due.
- Failure to pay: 0.5 percent of unpaid tax per month, up to 25 percent.
- Interest on unpaid tax.
Refund
If you are owed a refund, there’s no penalty for filing late. You have 3 years to claim it.
Extensions
Form 4868 gives six more months to file (not to pay).
What to do
File as soon as possible, even if you can’t pay. Set up an installment plan at irs.gov.
Relief
First-time penalty abatement may be available.
Two different penalties
The IRS charges two main penalties. The failure to file penalty is 5% of the unpaid tax for each month or part of a month that the return is late, up to a maximum of 25%. The failure to pay penalty is 0.5% of the unpaid tax per month, also up to 25%. If both apply in the same month, the filing penalty is reduced by the payment penalty, so the combined total is 5% a month. Interest also accrues on unpaid tax, at a rate that was 8% annually in 2024.
Minimum penalty
If a return is more than 60 days late, the minimum failure to file penalty is the smaller of $485 (for returns due in 2024) or 100% of the tax owed. The amount is adjusted yearly for inflation.
If you are owed a refund
There is no penalty for filing late if you are due a refund. However, you generally have three years from the original due date to claim a refund. After that the money becomes property of the US Treasury. The IRS says about $1 billion in refunds went unclaimed in some years.
Extensions
An extension (Form 4868) gives six extra months to file, until October 15, but does not extend the time to pay. If you owe tax, estimate and pay by the April deadline to avoid penalties. The failure to pay penalty drops to 0.25% a month if you have an approved installment plan.
What to do
- File as soon as possible, even if you cannot pay. This stops the larger penalty.
- Pay as much as you can, then set up a payment plan with the IRS online. Short term plans give up to 180 days, and long term plans have monthly payments.
- Gather records of income, such as W-2s and 1099s. You can get transcripts from your IRS online account.
- Do not ignore IRS notices. Respond by the date shown.
Penalty relief
The IRS offers First Time Penalty Abatement for people with a clean record for the past three years, which can remove failure to file and pay penalties. Reasonable cause relief applies for serious illness, disaster or other circumstances beyond your control. Request by calling the number on the notice or writing a letter.
Missing returns for years
The IRS generally asks for the last six years of returns. A tax professional can help if multiple years are missing. Taxpayers with no filing requirement, such as income below the filing threshold, face no penalty.
IRS penalty numbers
The failure-to-file penalty is 5 percent of unpaid tax for each month or part of a month the return is late, up to 25 percent. The failure-to-pay penalty is 0.5 percent per month, also up to 25 percent. If both apply in a month, the filing penalty is reduced by the payment penalty, so the combined rate is 5 percent. A return more than 60 days late has a minimum penalty of 450 USD or 100 percent of tax due, whichever is less (for returns due in 2025). Interest accrues on unpaid tax at the federal short-term rate plus 3 percentage points. First-time penalty abatement may waive penalties if you have a clean record for the past three years.
Based on data from the IRS
