IRS Penalty and Interest Calculator
Estimate what the IRS adds to an unpaid balance: the failure-to-file penalty, the failure-to-pay penalty, and interest that compounds daily. The current IRS quarterly interest rates are built in, so there's no rate to look up, just enter the amount and the dates.
IRS Penalty & Interest Estimator
Estimate the failure-to-file penalty, failure-to-pay penalty, and daily-compounded interest on unpaid federal taxes. The IRS interest rate is built in and applied by quarter, no rate to look up.
Estimated total owed
Important This is a general estimate, not tax or legal advice, and not the IRS's official calculation. Interest is the IRS's published quarterly underpayment rate (federal short-term rate + 3 points), compounded daily and applied by quarter; rates are current through Q3 2026, and any later period assumes the most recent rate. Interest also accrues on penalties (not shown here). The failure-to-file penalty is 5% of unpaid tax per month or part of a month (4.5% when the failure-to-pay penalty also applies), up to 25%, with a minimum penalty if you file more than 60 days late. The failure-to-pay penalty is 0.5% per month (0.25% under an approved installment agreement; 1% after a final notice of intent to levy), up to 25%. Penalties may be reduced or removed for reasonable cause or first-time penalty abatement. Only the IRS can determine your exact balance. Sources: IRS Quarterly Interest Rates, Failure to File, Failure to Pay.
How IRS penalties and interest work
When you owe federal tax and don't file or pay on time, the IRS adds three separate charges. They stack, so the total can grow quickly, but two of them shrink dramatically if you file on time and set up a payment plan.
Failure-to-file penalty
This is the expensive one: 5% of the unpaid tax for each month or part of a month your return is late, up to 25%. If you file more than 60 days late, a minimum penalty applies (it adjusts each year). Filing on time, even if you can't pay, avoids this penalty entirely, which is why filing should never be skipped.
Failure-to-pay penalty
0.5% of the unpaid tax per month, up to 25%. It drops to 0.25% per month while you're on an approved IRS payment plan, and rises to 1% after a final notice of intent to levy. When both penalties apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay penalty.
Interest
The IRS charges interest at the federal short-term rate plus 3 percentage points, set every quarter and compounded daily. Because it resets quarterly, the calculator applies the correct rate for each quarter your balance was outstanding. Interest also accrues on the penalties themselves.
Can these penalties be reduced?
Often, yes. The IRS may remove or reduce penalties through penalty relief, such as First-Time Abatement or reasonable cause. If you can't pay at all, Currently Not Collectible status can pause collection. Interest is rarely removed unless it was tied to an IRS error. For a deeper overview of your options, see our tax relief guide.
Frequently asked questions
How does the IRS calculate penalties and interest?
Failure-to-file is 5% per month (max 25%), failure-to-pay is 0.5% per month (max 25%), and interest is the federal short-term rate plus 3 points, compounded daily and updated quarterly. This tool applies each of those rules automatically.
What is the current IRS interest rate?
It changes each quarter. For 2025 it was 7%, and for 2026 it has been 7% (Q1), 6% (Q2), and 7% (Q3). The calculator uses the published rate for each quarter, so you don't have to enter it.
Does filing on time really help if I can't pay?
Yes, significantly. Filing on time avoids the failure-to-file penalty (5% per month), which is ten times larger than the failure-to-pay penalty (0.5% per month). Always file, even when you can't pay in full.
Can the penalties be removed?
They can, through First-Time Abatement or reasonable cause. Interest is generally not removed unless it resulted from an IRS error.
Is this the exact amount I owe?
No. It's a close estimate using the IRS's published rates and rules. Only the IRS can compute your exact balance, which can also be affected by extensions, prior payments, and adjustments. See the notes under the calculator.
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