What Is the IRS Late Filing Penalty for a 1040?

The IRS late filing penalty for a Form 1040 is 5% of your unpaid tax for each month or partial month your return is late, capped at 25% of what you owe. If you file more than 60 days after the deadline, a minimum penalty applies: for returns due in 2026, that floor is $525 or 100% of the unpaid tax, whichever is less.¹ A separate penalty for not paying and daily-compounding interest run alongside the filing penalty, so a late 1040 with a balance due gets expensive quickly.

How the 5% Monthly Penalty Is Calculated

The penalty starts the day after the April deadline passes. The IRS adds 5% of your unpaid balance for every month or fraction of a month the return is outstanding, which means filing a single day into a new month costs the same as filing on day 29.² Owe $8,000 and file three months late, and the filing penalty alone is $1,200.

The 5% keeps stacking each month until it hits 25% of your unpaid tax, which happens after five months. From that point the filing penalty stops growing, though other charges continue. The percentage applies only to what you still owe as of the original due date. Withholding, estimated payments, and refundable credits reduce the base the penalty is calculated on, so if enough was already paid in, the penalty shrinks with it.²

The $525 Minimum After 60 Days

Once your return is more than 60 days late, a floor kicks in. For returns due in 2026, the minimum penalty is $525 or 100% of the tax owed, whichever is smaller.¹ If you owe $400 and file 70 days late, the penalty is capped at your $400 balance. If you owe $2,000, the $525 minimum applies even if the straight month-by-month math would produce a lower figure.

The Separate Penalty for Not Paying

The filing penalty is only half the picture. The IRS also charges a failure-to-pay penalty of 0.5% per month on any tax unpaid by the April deadline, using the same partial-month rule and the same 25% ceiling.³ On a month-to-month basis it’s much smaller than the filing penalty, but it can keep running for years, whereas the filing penalty stops after five months.

File on time but pay late, and you face only the 0.5%. Pay on time but file late, and you face only the 5%. Do neither, and both apply in the same month.

How the Two Penalties Combine

When both hit in the same month, the IRS doesn’t simply add them. The 5% filing penalty is reduced by the 0.5% payment penalty for that month, keeping the combined charge at 5% rather than 5.5%.² That coordination lasts through the first five months, while the filing penalty is still accumulating.

After five months, the filing penalty caps at 22.5% (25% minus the offset from the payment penalty running alongside it). The 0.5% payment penalty then keeps going on its own until the balance is paid or it also reaches 25%. The combined maximum across both penalties is 47.5% of your unpaid tax.⁴ Interest runs on top of that.

Interest on the Unpaid Balance

Interest starts from the original due date of the return and compounds daily. For the first quarter of 2026, the individual underpayment rate is 7% per year.⁵ Starting April 1, 2026, it drops to 6%.⁶ The IRS resets the rate each quarter.

Interest applies to the assessed penalties as well as the underlying tax, and it runs until the full balance is paid.⁷ Unlike penalties, interest cannot be removed for reasonable cause. If you owed the tax, you owe the interest.

What an Extension Does and Doesn’t Cover

Filing Form 4868 gives you six additional months to submit the return, moving the deadline to October 15, 2026, for most filers.⁸ File by that extended date and the failure-to-file penalty never applies. Miss the October deadline, and the 5% monthly penalty starts running as though you never asked for the extension.

The extension covers filing, not payment. Your tax is still due April 15, and the 0.5% failure-to-pay penalty plus interest begin accruing from that date regardless of the extension.⁸ To avoid the payment penalty during the extension window, you generally need to have paid at least 90% of the tax shown on your return by April.⁹ Even if you can’t hit that mark, filing the extension still helps. The filing penalty costs ten times more per month than the payment penalty.

When Filing Late Costs Nothing

If you owe no tax or are due a refund, filing late produces no penalty. Five percent of zero is zero, and the IRS won’t fine you for a late return that shows no balance due.⁴

There’s still a deadline you should care about: you have three years from the original due date to claim a refund. After that window closes, the money stays with the Treasury and the IRS has no authority to release it.¹⁰

Two other situations produce automatic relief rather than a penalty. Service members in a combat zone get an extension equal to their time in the zone plus 180 days, with no penalties or interest during that period.¹¹ Taxpayers in federally declared disaster areas may also qualify for extended deadlines announced by the IRS.

Ways to Reduce or Remove the Penalty

First-Time Abate

If you’ve been compliant for the past three years, the IRS may erase the failure-to-file or failure-to-pay penalty entirely under its First-Time Abate program. You qualify if you filed all required returns for the prior three years, weren’t penalized during that period (or had any prior penalty removed for a reason other than First-Time Abate), and have paid or arranged to pay what you currently owe.¹²

You can request the relief by calling the number on your penalty notice; the representative checks your account. Form 843 works if you’d rather write. If you request reasonable cause relief but actually qualify for First-Time Abate, the IRS applies whichever is more favorable.¹²

Reasonable Cause

When First-Time Abate doesn’t fit, you can ask for the penalty to be removed for reasonable cause. The IRS recognizes situations like serious illness, a death in the immediate family, a fire or natural disaster that destroyed records, or an inability to obtain documents needed to complete the return.¹³ The test is whether you exercised ordinary care and prudence and still couldn’t file or pay on time. Forgetting or being busy doesn’t meet the standard. Documentation matters.

Installment Agreements

If you can’t pay in full, setting up an IRS payment plan cuts the failure-to-pay rate in half. Once your installment agreement is approved and your return was filed on time, the 0.5% monthly rate drops to 0.25%.³ Interest keeps running, but the reduced penalty rate makes the plan meaningfully cheaper than ignoring the balance.

One Boundary Worth Knowing

Everything above is civil: money added to your account. Willfully refusing to file is a separate criminal offense, a misdemeanor punishable by up to $25,000 in fines and up to one year in prison.¹⁴ Prosecution is rare and generally reserved for people who evade for years, but the exposure exists. Filing a very late return is always better than never filing at all.

1
Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges
2
Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax
3
Internal Revenue Service. Failure to Pay Penalty
4
Internal Revenue Service. Failure to File Penalty
5
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
6
Internal Revenue Service. Bulletin No. 2026-08
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Internal Revenue Service. Interest
8
Internal Revenue Service. Form 4868
9
Internal Revenue Service. 20.1.2 Failure To File/Failure To Pay Penalties
10
Office of the Law Revision Counsel. 26 US Code 6511 – Limitations on Credit or Refund
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Internal Revenue Service. Extension of Deadlines – Combat Zone Service
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Internal Revenue Service. Administrative Penalty Relief
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Internal Revenue Service. Penalty Relief for Reasonable Cause
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Office of the Law Revision Counsel. 26 US Code 7203 – Willful Failure to File Return, Supply Information, or Pay Tax