- The failure to file penalty is 5% of the tax due for each month or part of a month a return is late, up to 25%.
- The failure to pay penalty is 0.5% per month, also capped at 25%. It drops to 0.25% a month while you are on an approved payment plan if you filed on time, and rises to 1% after a notice of intent to levy goes unpaid for 10 days.
- For returns due after 12/31/2025 that are more than 60 days late, the minimum failure to file penalty is the smaller of $525 or 100% of the tax owed.
- The IRS may remove or reduce a penalty if you show reasonable cause. Interest cannot be removed unless the penalty is.
The failure to file penalty is the charge for turning in a return after its due date. The failure to pay penalty is the charge for leaving tax unpaid after the due date. They are separate, and you can owe both.
The two penalties side by side
| Failure to file | Failure to pay | |
|---|---|---|
| What triggers it | Filing after the due date | Not paying the tax by the due date |
| Monthly rate | 5% of the tax due | 0.5% of the unpaid tax |
| Maximum | 25% | 25% |
| Counts partial months? | Yes, each month or part of a month | Yes, full monthly charge even if you pay before the month ends |
| Lower rate | Not listed on the IRS page | 0.25% a month while an approved payment plan is in effect, for people who filed on time |
| Higher rate | Not listed on the IRS page | 1% a month if you do not pay within 10 days of a notice of intent to levy |
When both penalties apply in the same month, the IRS says the failure to file penalty is reduced by the failure to pay amount. So the combined charge is 5% for each of the first five months, and the failure to pay penalty keeps running after the filing penalty hits its maximum.
The minimum penalty
If a Form 1040 or 1120 is more than 60 days late, the failure to file penalty has a floor: the amount listed on the IRS page or 100% of the tax owed, whichever is less. For returns due after 12/31/2025 the amount is $525. The page lists $510 for 2025, $485 for 2024 and $450 for 2023. The floor only bites when the tax owed is small, because 5% a month on a larger bill passes it quickly.
A worked example on a $4,000 balance
These numbers are our own arithmetic from the IRS rates, with interest left out, so a real bill will be higher.
| What happens | Calculation | Penalty |
|---|---|---|
| File on time, pay 5 months late | 0.5% x 5 months x $4,000 | $100 |
| File 5 months late and pay when you file | 5% x 5 months x $4,000 (the two penalties combined) | $1,000 |
| File on time, then pay on an approved plan | 0.25% x $4,000, per month on the plan | Up to $10 a month, falling as the balance falls |
| File on time, never pay, until the cap | 25% x $4,000 | $1,000 (after 50 months at 0.5%) |
In this example, filing on time cuts the penalty from $1,000 to $100. The IRS advises filing on time even when you cannot pay in full. If you cannot pay, see IRS payment plans for eligibility and fees on a payment plan.
Getting a penalty removed
The failure to file page says the penalty does not apply if you can show the failure was due to reasonable cause, and it lists this relief for individuals, businesses and partnerships. On the payment side, the IRS may remove or reduce penalties if you acted in good faith and show reasonable cause. The IRS adds that interest cannot be removed or reduced unless the penalty is.
Partnership and S corporation returns use a different formula: a per-partner or per-shareholder amount multiplied by the months late, for up to 12 months. This guide covers individual returns.
Frequently asked questions
What is the IRS late filing penalty?
It is 5% of the tax due for each month or part of a month a return is late, up to a maximum of 25%.
What is the IRS late payment penalty?
It is 0.5% of the unpaid taxes for each month or part of a month, capped at 25%. The rate falls to 0.25% a month while you are on an approved payment plan if you filed on time, and rises to 1% a month if you do not pay within 10 days of a notice of intent to levy.
Should I file if I cannot pay?
The IRS advises filing on time even if you cannot pay in full, because the failure to file penalty is separate and much larger each month than the failure to pay penalty.
What is the minimum penalty for filing more than 60 days late?
For Forms 1040 and 1120 due after 12/31/2025, it is $525 or 100% of the tax owed, whichever is less.
Can the IRS remove a penalty?
It may remove or reduce a penalty if you can show reasonable cause. Interest cannot be removed or reduced unless the penalty is.
Sources
- IRS: Failure to file penalty (last reviewed October 5, 2026)
- IRS: Failure to pay penalty (last reviewed October 23, 2026)
- IRS: Payment plans; installment agreements (page last reviewed August 13, 2026)
Each source was opened and read on October 26, 2026. See how we verify.