Calculator estimate, not tax advice. Last updated: October 21, 2026.
IRS Penalty And Interest Calculator
IRS Penalty and Interest Calculator
Estimate the failure-to-file penalty, failure-to-pay penalty, and interest the IRS may add to an unpaid balance. Estimate only. Nothing is stored.
Estimate only. The IRS calculates penalties and interest using exact daily rates and rules this tool simplifies. The rate you enter is held constant and interest is estimated on the unpaid tax only. Historical quarterly rates, interest on penalties, payments, extensions, notices and relief can change the actual amount. This scenario assumes an individual income-tax return that was filed on time or is still unfiled. If you already filed late, request a review of the actual filing date. Confirm your figures with the IRS or a tax professional.
How IRS penalties stack up
When you owe the IRS and do not pay on time, two penalties can apply, plus interest. The failure-to-pay penalty is 0.5 percent of the unpaid tax for each month or part of a month it stays unpaid, up to a maximum of 25 percent. The failure-to-file penalty is much steeper at 5 percent per month, also capped at 25 percent, which is why filing on time matters even if you cannot pay.
The combined-month rule
In any month where both penalties apply, the failure-to-file penalty is reduced by the failure-to-pay penalty, so the file penalty effectively runs at 4.5 percent that month rather than 5. There is also a minimum failure-to-file penalty if your return is more than 60 days late. The calculator applies both rules to keep the estimate realistic.
Interest on top
The IRS also charges interest on unpaid tax, and on the penalties themselves, at a rate that changes quarterly. It has been set at 7 percent a year for ordinary underpayments in October to December 2026, compounded daily. Because interest keeps running until the balance is paid, an old balance can grow substantially.
How penalties can be reduced
Penalty relief depends on the penalty and your compliance history. IRS administrative relief now includes Automatic Exemption from Penalty for eligible returns, alongside First Time Abate and reasonable-cause relief. A payment plan does not automatically stop charges: the failure-to-pay rate can fall to 0.25% per month for an individual who filed on time and has an approved installment agreement. Interest continues, and currently-not-collectible status does not stop penalties or interest.
How this calculator works
This tool estimates failure-to-file and failure-to-pay penalties plus daily-compounded interest on unpaid tax only. The standard failure-to-file charge is 5% of unpaid tax for each month or partial month a return is late, up to 25%. The standard failure-to-pay charge is 0.5% per month or partial month, also up to 25%. When both apply in the same month, the failure-to-file portion is reduced to 4.5%, with the 0.5% failure-to-pay portion added separately. A minimum failure-to-file penalty can apply once a return is more than 60 days late; this calculator uses the return due year you select.
The interest calculation keeps your selected annual rate constant and compounds daily on unpaid tax only. The IRS ordinary underpayment rate is 7% for October to December 2026. Actual IRS interest can also apply to penalties, and quarterly rate changes, payments, notices and relief can change the balance.
Before choosing a payment option, compare this projection with your IRS account or notice and confirm the tax period, filing date, payments and any relief already applied. If you cannot pay the verified balance, the existing free evaluation can help you review available tax-debt options.
Sources and references
These figures come from primary sources, which are updated as the rules change:
- IRS, penalties (failure to file and failure to pay)
- IRS, interest on underpayments
- 26 U.S.C. 6651, failure to file and pay
Frequently Asked Questions
How much is the IRS failure-to-file penalty?
The failure-to-file penalty is 5 percent of the unpaid tax for each month or part of a month your return is late, up to a maximum of 25 percent. If your return is more than 60 days late, a minimum penalty also applies. Filing on time, even without paying, avoids this larger penalty.
How much is the IRS failure-to-pay penalty?
The failure-to-pay penalty is 0.5 percent of the unpaid tax per month or part of a month, up to 25 percent. In months where both the file and pay penalties apply, the file penalty is reduced so the combined rate is 5 percent, not 5.5.
How much interest does the IRS charge?
The IRS interest rate changes every quarter and is the federal short-term rate plus 3 percent, compounded daily. It has been set at 7 percent a year for ordinary underpayments in October to December 2026. Interest accrues on both the unpaid tax and the penalties until the balance is fully paid.
Can IRS penalties be removed?
Sometimes. First-time penalty abatement can remove penalties for taxpayers with a clean compliance history, and reasonable-cause relief may apply when circumstances beyond your control caused the delay. Interest is harder to remove but stops once the balance is paid.
How do I stop penalties from growing?
File missing returns and review the balance with the IRS. An approved installment agreement may reduce the failure-to-pay rate for an individual who filed on time, but interest continues. Currently-not-collectible status pauses most collection, not penalties or interest. An Offer in Compromise is not an automatic charge freeze; follow its eligibility and payment requirements. Paying the balance or receiving applicable relief affects what remains due.
Can IRS penalties be waived?
Often, yes. First-time penalty abatement can remove failure-to-file and failure-to-pay penalties for taxpayers with a clean compliance history for the prior three years, and reasonable-cause relief may apply when circumstances beyond your control caused the delay.
What is first-time penalty abatement?
First Time Abate is administrative relief for eligible failure-to-file, failure-to-pay or failure-to-deposit penalties when the IRS compliance-history requirements are met. It is not a waiver of every penalty or of the underlying tax. Interest attributable to a penalty is adjusted when that penalty is reduced or removed. Newer Automatic Exemption from Penalty relief has separate applicable-return and processing rules.
Does the IRS ever remove interest?
Interest is rarely removed on its own, because it is set by law, but interest charged specifically on a penalty that gets abated is removed with the penalty. Resolving the balance is the main way to stop interest from growing.
Does CuraDebt calculate or settle IRS penalties, and is it a tax firm?
CuraDebt is a free service that reviews the information you submit and, where appropriate and permitted by law, matches you with independent, licensed providers for debt relief or tax resolution. CuraDebt is not a law firm and does not provide legal or tax advice. Results vary and are not guaranteed.
Related Resources
- All debt and tax calculators
- Offer in Compromise calculator
- Currently Not Collectible qualifier
- How penalty abatement works
- IRS installment agreement payment calculator