IRS Penalty & Interest Calculator
Estimate IRS failure-to-pay penalties and interest accrued on unpaid federal taxes based on IRS rules.
IRS interest = Federal short-term rate + 3%. Current underpayment rate is typically 8% (check IRS.gov for current quarter).
Formulas Used
Unpaid Balance = Tax Owed − Amount Paid
Failure-to-Pay Penalty (IRC §6651(a)(2))
= Unpaid × 0.5% × months unpaid | capped at 25% of unpaid tax
Each started month counts as a full month (max 50 months).
Failure-to-File Penalty (IRC §6651(a)(1)) — only if return filed late:
= Unpaid × 4.5%* × months late | capped at 22.5% of unpaid tax
*Net rate = 5% FTF − 0.5% FTP credit = 4.5% per month (max 5 months).
Interest (IRC §6601)
= (Unpaid + Penalties) × [(1 + r/365)days − 1]
where r = Federal short-term rate + 3% (compounded daily).
Total Due = Unpaid + FTP Penalty + FTF Penalty + Interest
Assumptions & References
- Failure-to-pay penalty: 0.5% per month, max 25% — IRC §6651(a)(2).
- Failure-to-file penalty: 5% per month, max 25%; reduced by FTP penalty for overlapping months — IRC §6651(a)(1).
- Interest rate = Federal short-term rate + 3%, compounded daily — IRC §6601 & §6621.
- The IRS adjusts the federal short-term rate quarterly; check IRS.gov for the current rate.
- Minimum failure-to-file penalty (returns >60 days late): the lesser of $485 (2024) or 100% of unpaid tax — not included in this estimate.
- This calculator does not account for estimated tax underpayment penalties (Form 2210), accuracy-related penalties, or fraud penalties.
- Payments are assumed to have been applied on the due date; partial payments reduce the unpaid balance proportionally.
- Results are estimates only. Consult a tax professional or the IRS for official calculations.