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IRS Penalty and Interest Calculator

How much is the IRS penalty for filing or paying late?

Late filing is 5% of the unpaid tax per month and late payment 0.5% per month, each capped at 25%, plus interest at 7% compounded daily. Payroll deposits add 2% to 15%, and late 1099s and W-2s cost $60 to $340 per form for each copy. Pick the return below.

1. Forms late

2. Forms due in

3. Filed with the IRS

For a 1099-NEC or W-2 due Feb 1, 2027, the first tier ends March 3, 2027.

The contractor or employee copies were late too (a second, separate penalty)Average gross receipts of $5,000,000 or less (lower yearly caps)

Estimated penalties and interest

$3,120

$130 per form, for each copy

IRS copies (section 6721): $1,560
Payee copies (section 6722): $1,560

Penalties like these usually start in the books: contractors with no W-9, payroll liabilities that never cleared, months nobody entered. Ledgerbrook cleans up QuickBooks Online files from $99 per month of backlog.

Send your file for a free review →The 1099 late filing penalty, explained

Rates

1099 and W-2 late filing penalty per form

Charged once for the copy filed with the IRS and again for the copy owed to the contractor or employee. The cap is per year, for each of the two penalties; the lower cap applies with average gross receipts of $5,000,000 or less over the last 3 years.

Filed	Due in 2026	Due in 2027	2027 cap, small filer	2027 cap, others
Within 30 days	$60	$60	$244,500	$698,500
31 days late through August 1	$130	$130	$698,500	$2,095,500
After August 1, or never	$340	$340	$1,397,000	$4,191,500
Intentional disregard	$680+	$690+	No cap

Sources: IRS information return penalties, General Instructions for Certain Information Returns and Rev. Proc. 2025-32, sections 3.57 and 3.58. Intentional disregard is the larger of the dollar figure or 10% of the amounts that should have been reported.

Worked examples

The three defaults, worked through

12 late 1099-NECs

Due Feb 1, 2027, filed with the IRS and sent to contractors on April 15: past 30 days, before August 1, so $130 a form. $1,560 for the IRS copies plus $1,560 for the contractor copies is $3,120.

A short Q3 2026 Form 941

$18,000 of tax, $12,000 deposited on time, $6,000 paid with the return filed Dec 15 instead of Nov 2. Deposit penalty $600 (10%), late filing $540 (2 months at 4.5%), late payment $60, interest $54.15: $1,254.15.

A 2025 Form 1040 filed in August

$8,000 owed April 15, 2026, no extension, filed and paid August 20: five months or part months. Late filing $1,800 (22.5%), late payment $200 (2.5%), interest $220.44: $2,220.44.

Method

How the calculator works

Information returns: the per-form amount for the tier you pick, times the number of forms, capped at the yearly maximum, for the IRS copies (IRC §6721) and again for the payee copies (IRC §6722) when those were late too. It assumes both copies fall in the same tier.
Failure to file and pay: 5% and 0.5% of the tax unpaid on the due date for each month or part of a month, under IRC §6651, with the filing rate reduced by the payment rate in months when both apply (failure to file, failure to pay). Tax paid by the due date, including Form 941 deposits, is not part of the base.
Failure to deposit: 2%, 5%, 10% or 15% of the amount not deposited on time, by calendar days late (IRC §6656; IRS failure to deposit penalty). Paying with the return or by bill instead of depositing is the 10% tier.
Interest: the IRS underpayment rate for each quarter, compounded daily, on the unpaid tax from its due date and on the failure-to-file penalty from the filing due date. Quarters the IRS has not announced yet use the latest rate, 7%. Interest on the other penalties starts once the IRS bills them and is left out.
Left out: the payment penalty rising to 1% a month after a notice of intent to levy, the 0.25% rate under an installment agreement for individuals, partial payments, state penalties, and estimated tax penalties (the quarterly estimated tax calculator covers those). Due dates on weekends move to Monday; holidays are not modelled. The figures are estimates, not tax advice.

Frequently asked

IRS penalty questions

The full rules are in two guides: the 1099 late filing penalty and the Form 941 late filing penalty.

How do I calculate my IRS penalty?

Count the months or parts of a month the return is late and the tax unpaid. Failure to file is 5% of the unpaid tax per month, failure to pay is 0.5% per month, and in a month when both apply the filing rate drops to 4.5%. Each stops at 25%. Interest is added on top at the IRS quarterly rate, compounded daily. An $8,000 balance on a return filed and paid four months and five days late comes to $1,800 plus $200, before interest.

What is the current IRS interest rate on unpaid tax?

7% a year for the quarter that began July 1, 2026, the federal short-term rate plus 3 points. It was 6% for April to June 2026. The IRS resets it each quarter and compounds it daily on the unpaid tax and on penalties (IRS quarterly interest rates).

What is the maximum penalty for filing late?

For a return with tax due, 25% of the unpaid tax, reached after five months. When the tax is also unpaid, the filing penalty tops out at 22.5% and the payment penalty keeps running to its own 25% cap. An income tax return more than 60 days late owes at least $525 (returns due in 2026) or $535 (due in 2027), or the whole unpaid tax if that is less.

Is there a late penalty if no tax is owed?

Not on Form 1040, 1120 or 941: those penalties are a percentage of unpaid tax, so a return with everything paid on time owes no failure-to-file penalty. Partnership and S corp returns are different. Forms 1065 and 1120-S are charged $255 per owner per month ($260 for returns due in 2027), up to 12 months, with no tax due at all. Information returns like the 1099 are charged per form.

What is the IRS one-time penalty forgiveness?

First Time Abate. It removes a failure-to-file, failure-to-pay or failure-to-deposit penalty for one return period when the same return was filed on time with no penalties for the 3 years before (12 quarters for Form 941). Ask by phone or on Form 843; interest on the removed penalty comes off too (IRS: First Time Abate). The Internal Revenue Manual lists the 1099 series as not eligible, so late 1099s need reasonable cause instead.

Updated October 30, 2026