Tax Extension Penalties: Late Filing vs Late Payment

Late filing

5% a month, up to 25%

Late payment

0.5% a month, up to 25%

60+ days late, minimum

$525 or the tax due

Interest

From the due date

The late-filing penalty

If you file your return after its due date, including any extension, the penalty is usually 5% of the tax due for each month or part of a month the return is late, up to 25%. "Tax due" means what you still owe after on-time payments and credits.

If the return is more than 60 days late, a minimum penalty applies: for returns due after December 31, 2025, the IRS lists $525 or 100% of the tax due, whichever is less. The IRS adjusts that amount for inflation.

A valid extension moves your due date to October 15, 2027, so a return filed by then has no late-filing penalty.

The late-payment penalty

Tax not paid by the original due date gets a penalty of usually 0.5% of the unpaid tax for each month or part of a month, up to 25%. An extension to file isn't an extension to pay, so this penalty applies with or without Form 4868.

• It rises to 1% a month if you don't pay within 10 days of an IRS notice of intent to levy.
• It drops to 0.25% a month while an approved payment plan is in place, if you filed on time.

When both apply in the same month

If you're late filing and late paying in the same month, the late-filing penalty is reduced by the late-payment penalty for that month. The late-filing penalty hits its 25% cap after 5 months; the late-payment penalty keeps running until it reaches its own cap.

Interest

Interest starts on the due date of the tax and runs until it's paid in full. The rate can change each quarter. The IRS doesn't remove interest for reasonable cause; it reduces it only for an unreasonable IRS error or delay, or when the tax or penalty it's charged on is reduced.

Examples

These are simplified examples with round numbers, not exact IRS calculations.

• Extended and paid on time. You file Form 4868 by April 15, 2027, pay your estimated $2,000 balance with it, and file in August. No penalty, no interest.
• Extended, paid late. You file Form 4868 by April 15, 2027 but pay the $2,000 when you file in August, about 4 months later. Late-payment penalty: roughly 0.5% times 4 months, about $40, plus interest. No late-filing penalty.
• No extension, filed and paid late. You skip the extension and file and pay the $2,000 in August. The late-filing penalty is about 5% a month, reduced by the 0.5% late-payment penalty, so roughly 4.5% times 4 months, $360, plus about $40 of late-payment penalty and interest. Filing the extension would have saved most of that.

Reasonable cause and the 90% rule

Either penalty can be removed if you show the delay was due to reasonable cause, not neglect. Explain it in a statement with your return, not with Form 4868. For the extension period, Form 4868 treats you as having reasonable cause for late payment if at least 90% of your total tax was paid by the regular due date and you pay the rest with your return.

Filing Form 4868 late

A late Form 4868 doesn't work: the IRS denies an extension request that isn't filed on time, and your return stays due on the original date. If you missed the deadline, file the return as soon as you can, because the late-filing penalty grows each month. Last-minute options.

Questions people ask

Is there a penalty if I'm getting a refund?

The late-filing penalty is a percentage of the tax due after on-time payments and credits. If you owe nothing, there's no tax due to apply it to.

Does the extension stop interest?

No. Interest runs on unpaid tax from April 15, 2027 whether or not you extend.

Can I get the penalty removed?

If you had reasonable cause, ask the IRS. Interest generally stays.