Finance calculators

IRS Interest Calculator

Updated Oct 7, 2026 By Infinity Calculator
Rate Formulas Sources
Tax Details
Auto-fills the standard federal due date (editable).
C-Corporations use a higher rate on large underpayments; Individual and Trust / Estate use the same rate.
Unpaid federal income tax before penalties or interest.
Interest begins accruing from this date.
Interest and penalties are computed through this date.
Situation Modifiers
The date on the first IRS notice billing this balance. Leave blank if you have not been billed: no interest is charged on the Failure to Pay penalty until it is billed.
Applicable Penalties

Select all penalties that apply. Interest accrues on the unpaid tax and on the penalties: on the Failure to File and accuracy-related penalties from the return due date (including extensions), and on the Failure to Pay penalty from the IRS bill date if the bill is not paid on time (IRC §6601(e)(2)).

5% of unpaid tax per month or partial month, up to a maximum of 25%.
0.5% of unpaid tax per month or partial month, up to 25%. Reduced to 0.25%/month for an individual who filed on time and has an active installment agreement.
20% of the portion of the underpayment attributable to negligence or substantial understatement.
IRS Underpayment Interest Rates Applied
Leave blank to use official IRS quarterly rates.
View official IRS underpayment interest rates (IRS.gov) Opens in a new tab.
Payments & Credits Made After Due Date

Enter any partial payments or credits applied after the original due date. Each payment reduces the running balance on the date it was received, which lowers the interest accruing in subsequent periods.

Tax Balance Adjustments

Record changes to the tax itself — an IRS bill for added tax after an audit or a CP2000 notice, or a change that lowers your tax. Enter the date of the IRS bill or change. Positive values add tax; negative values lower it. Every change counts from the original due date.

Calculation Results

Official IRS quarterly interest rates: https://www.irs.gov/payments/quarterly-interest-rates
Tax Bearing Interest
$0.00
Total Penalties
$0.00
Total Interest (daily compounded)
$0.00
Total Amount Due
$0.00
Summary of Amounts
Step-by-Step Solution
Balance Composition Over Time
What Makes Up the Total Due
Interest Accrual by IRS Rate Period
Interest accrual segmented at each IRS quarterly rate boundary, payment, adjustment, and penalty assessment date, per IRC §6621 and §6622.
Period Start Period End Days Annual Rate Daily Rate Principal Balance Interest Accrued Segment Notes
Detailed Calculation Report
Line-by-line report of every interest segment, penalty accrual, payment, and adjustment with the governing Internal Revenue Code citation.
Date IRC Citation Explanation Factor / Rate Period Interest / Penalty Cumulative Total

Introduction

If you paid your federal taxes late, the IRS adds interest and penalties to what you owe. This IRS Interest Calculator adds those amounts up so you know your real payoff figure.

Enter your tax year, the amount you owed, your due date, and the date you plan to pay. The tool uses the official IRS quarterly interest rates and compounds the interest daily, the same way the IRS does under IRC §6622.1

You can also add the penalties that apply to you, like the Failure to File penalty (5% per month) and the Failure to Pay penalty (0.5% per month).4 Mark if you filed an extension or have an installment agreement, and the math changes to match. Partial payments can be added too, and each one lowers the balance from the day it is paid. So can changes to the tax itself from an audit or a CP2000 notice, which count from the original due date.14

Results include the total due, a step-by-step breakdown, charts, and a full report showing the tax code rule behind every line. Use it to check an IRS notice, plan a payoff, or see what waiting a few more months will cost you.

How to use our IRS Interest Calculator

Enter your unpaid tax, the dates it was due and paid, and any penalties that apply. The calculator returns your IRS interest, penalties, and total amount due, plus a step-by-step breakdown and a full report by rate period.

Tax Year: Pick the year the unpaid tax belongs to. This fills in the normal federal due date for you.

Taxpayer Type: Choose Individual, C-Corporation, or Trust / Estate. C-Corporations that owe more than $100,000 pay a higher interest rate.1

Original Tax Amount Owed: Type the unpaid tax only. Do not add penalties or interest here.

Original Tax Due Date: Enter the date the tax was due. IRS interest starts on this date.2 Change it if your due date was different.

Final Payoff Date: Enter the date you plan to pay in full. Use today for your current balance, or a later date to see what you will owe then.

Extension Filed: Check this box if you filed a timely extension. It stops the late filing penalty until the extended date, but interest and the late payment penalty still run.2

Installment Agreement: Check this box if the IRS approved a payment plan, then enter the date the plan was approved. If you filed your return on time as an individual, the late payment penalty drops from 0.5% to 0.25% per month for the months the plan is in place. Months before the plan stay at 0.5%.4

Date of the IRS Bill: Enter the date on the first IRS notice that billed you, if you have one. Interest on the late payment penalty starts on that date, and only if the bill is not paid within 21 calendar days (10 business days if the bill is $100,000 or more). If you pay in full within that window, no interest is charged for the time after the bill date.14 Leave it blank if you have not been billed yet.

Failure to File (FTF): Check this if the return was filed late. It adds 5% of the unpaid tax per month, up to 25%.3

Failure to Pay (FTP): Check this if the tax was not paid by the due date. It adds 0.5% of the unpaid tax per month, up to 25%.4

Accuracy-Related Penalty: Check this if the IRS charged a 20% penalty for a wrong or understated amount.5

Override Interest Rate: Leave this blank to use the official IRS quarterly rates. Enter a rate only if you want one flat rate for the whole period.

Payments & Credits: Click Add Payment and enter the date and amount of each payment made after the due date. Each payment lowers the balance, so less interest builds up after that date.

Tax Balance Adjustments: Click Add Adjustment for a change to the tax itself, like an IRS bill for added tax after an audit or a CP2000 notice, or a change that lowers your tax. Enter the date of the bill or change and the amount: a plus number adds tax and a minus number lowers it. Interest on the change counts from the original due date.14 The Failure to Pay penalty on added tax starts only if the bill is not paid within 21 calendar days (10 business days if it is $100,000 or more).4 A lower tax also lowers the Failure to File and Failure to Pay penalties from the start, and added tax raises the Failure to File penalty.18

Calculate, Reset, and Print: Click Calculate Interest & Penalties to see your results. Click Reset Calculator to start over, or Print Results to save a copy.

IRS Interest and Penalties on Unpaid Taxes

When you owe federal tax and do not pay it by the due date, the IRS charges you two things: interest and penalties. Interest and the late payment penalty both start on the original due date of the return, even if you filed an extension.2 An extension gives you more time to file your paperwork, not more time to pay.2

How IRS Interest Works

Interest on unpaid tax is set by IRC §6601 and §6621.2 The rate is the federal short-term rate plus 3% for most people.1 Big C-corporation underpayments over $100,000 pay short-term rate plus 5%.1

The IRS sets a new rate every three months (each quarter).1 So a long unpaid balance may use several different rates over time. Under IRC §6622, the interest compounds daily.1 That means each day you owe a little interest on your tax, your penalties, and the interest that already piled up.1 The daily rate is the yearly rate divided by 365 (or 366 in a leap year).

The Main Penalties

  • Failure to File (IRC §6651(a)(1)): 5% of the unpaid tax each month, or part of a month, that the return is late.3 It stops at 25%.3
  • Failure to Pay (IRC §6651(a)(2)): 0.5% of the unpaid tax each month, or part of a month, up to 25%.4 If you filed on time as an individual, it drops to 0.25% a month while an approved installment agreement is active (IRC §6651(h)).4
  • Accuracy-Related Penalty (IRC §6662): a one-time 20% charge when you understate your tax through carelessness or a big mistake.5

If both the file penalty and the pay penalty hit in the same month, the 5% file penalty is cut by the 0.5% pay penalty, so you are charged 4.5% that month (IRC §6651(c)(1)).4 The file penalty tops out after 5 months, while the pay penalty keeps going.3 At 4.5% a month, that is 22.5% in all.

If your return is more than 60 days late, there is a minimum failure-to-file penalty.3 It is the smaller of a set dollar amount (which rises each year for inflation) or 100% of the tax you owe.3 For returns due in 2026, the set amount is $525.17

Why Paying Something Helps

Every payment you make lowers the balance from that day forward. A smaller balance means less interest is added each day and smaller monthly penalties. Even a partial payment slows the growth. Changes to the tax itself work differently: added tax from an audit or a CP2000 notice bears interest from the original due date,14 and if an amended return lowers your tax, the IRS lowers the related interest too.2

Things to Remember

  • Interest keeps running until the tax, penalties, and interest are paid in full.1
  • Interest on the late filing and accuracy-related penalties starts on the due date of the return, including extensions, not the day you get the notice.2 Interest on the late payment penalty starts only once the IRS bills it and the bill goes unpaid past its due date.14
  • Penalties can sometimes be removed for reasonable cause or first-time abatement, but interest is rarely removed.2
  • The IRS posts its current quarterly rates on IRS.gov, and they change often.1

These numbers are estimates for planning. Your real IRS notice may differ a little based on posting dates, how the IRS applies your payments, and any relief you qualify for.

Formulas used

Tax Base for Penalties & Interest
\text{Tax Base} = \text{Tax Owed} + \text{Adjustments}_{\text{pre-due}} + \text{Decreases}_{\text{later}} - \text{Payments}_{\text{pre-due}}
Daily interest rate (IRC §6622)
r_d = \frac{r_{\text{annual}}}{D}, \quad D = \begin{cases} 366 & \text{leap year} \\ 365 & \text{otherwise} \end{cases}
Daily compounded interest for a segment 1
I_k = B_k \left[ \left(1 + r_{d,k}\right)^{n_k} - 1 \right]
Total interest across all segments
I_{\text{total}} = \sum_{k=1}^{N} B_k \left[ \left(1 + r_{d,k}\right)^{n_k} - 1 \right]
Failure to File penalty (IRC §6651(a)(1), reduced by FTP) 3
\text{FTF} = \min\!\left( \sum_{m=1}^{M_{\text{FTF}}} \left(5\% \times B_{\text{FTF}} - \text{FTP}_m\right),\ 25\% \times B_{\text{FTF}} \right), \quad B_{\text{FTF}} = \text{Tax Base} + \text{Added tax}
Failure to Pay penalty (IRC §6651(a)(2), (a)(3), §6651(h)) 4
\text{FTP} = \min\!\left( \sum_{m=1}^{M_{\text{FTP}}} r_{\text{FTP},m} \times U_m,\ 25\% \times \text{Tax Base} \right) + \sum_{j} \min\!\left( \sum_{m \ge w_j} r_{\text{FTP},m} \times U_{j,m},\ 25\% \times A_j \right), \quad r_{\text{FTP},m} = \begin{cases} 0.25\% & \text{months during an approved installment agreement, individual who filed on time} \\ 0.5\% & \text{otherwise} \end{cases}, \quad w_j = \text{bill } j + 21 \text{ days (10 business days if } A_j \ge \$100{,}000)
Accuracy-related penalty (IRC §6662) 5
P_{\text{acc}} = 20\% \times \text{Tax Base}
Total amount due
\text{Total} = \text{Tax Base} + \text{Added tax} + P_{\text{total}} + I_{\text{total}} - \text{Payments}_{\text{post}}

Frequently asked questions

What is the IRS interest rate on unpaid taxes right now?

For most individuals the rate is 7% per year for the fourth quarter of 2026 (October to December).1 The IRS sets it as the federal short-term rate plus 3%.1

Large C-corporation underpayments over $100,000 pay short-term plus 5%, which is 9% for the same quarter.1

The IRS resets the rate every quarter, so check IRS.gov for the newest number before you plan a payoff.

How much IRS interest do I pay per day?

Take the yearly rate and divide it by 365 days (366 in a leap year). At 7%, that is about 0.0192% a day.

Example: on a $10,000 balance you owe roughly $1.92 a day, or about $58 a month.

The daily amount grows a little each day because the interest compounds.

Does the IRS charge interest on penalties?

Yes. Penalties get added to your balance, and interest then builds on that larger total.2

For the failure-to-file and accuracy-related penalties, interest runs from the due date of the return (including extensions), not from the day the IRS mailed you a notice.2

Other penalties, including the failure-to-pay penalty, are charged interest only if you do not pay them within 21 calendar days of the IRS bill (10 business days if the bill is $100,000 or more).14 Interest then runs from the date of the bill.14

Can IRS interest be removed or waived?

Almost never. Interest is set by law, so the IRS cannot cancel it just because you had a good reason for paying late.2

The main exception is when the interest was caused by an IRS error or an unreasonable delay by an IRS employee.2

If penalties are removed, the interest charged on those penalties is removed too.2

What is first-time penalty abatement?

It is a break the IRS gives to taxpayers with a clean record. It can remove the failure-to-file, failure-to-pay and failure-to-deposit penalties.6

To qualify you generally need:

  • The same type of return filed on time for the three years before
  • No penalties in those three years other than the estimated tax penalty, or only penalties that were later removed for reasonable cause6

You can ask by calling the number on your IRS notice or by sending Form 843.6

Starting in summer 2026, the IRS is replacing it with Automatic Exemption from Penalty, which gives the same relief without a request, beginning with 2025 tax year returns.6

What counts as reasonable cause for removing IRS penalties?

Reasonable cause means something outside your control stopped you from filing or paying on time.7 Examples include:

  • Serious illness or death in the family
  • Fire, flood, or other disaster
  • Records destroyed or unavailable
  • System problems that delayed a timely electronic filing or payment7

Not having the money is usually not enough by itself.7 You must show you tried and still could not comply.

What is the maximum penalty the IRS can charge for late taxes?

The combined late-filing and late-paying penalties top out at 47.5% of your unpaid tax.

That is 22.5% for filing late (5 months at 4.5%) plus 25% for paying late (50 months at 0.5%).

Interest is separate and keeps running with no cap until the balance is zero.1 Fraud penalties can reach 75%.13

What happens if I file late but the IRS owes me a refund?

There is usually no penalty. Both the late-filing and late-paying penalties are a percentage of unpaid tax, and zero unpaid tax means zero penalty.3

But you generally have only three years from the return due date to claim the refund.12 The IRS limits a refund to tax paid in the 3 years before you file, and it counts withholding and estimated tax as paid on the return due date.12

Miss that window and the money goes to the government for good.12

How does the IRS apply a partial payment to my balance?

If you do not tell the IRS where to put it, the payment usually goes to tax first, then penalties, then interest for that tax year.8

You can send a written note with a voluntary payment telling the IRS which year and which part of the bill to apply it to.9 Payments collected by force, like a levy, are applied in the order that best serves the government.9

Does the failure to pay penalty ever go above 0.5% per month?

Yes. If the IRS sends a final Notice of Intent to Levy and you do not pay within 10 days, the rate jumps to 1% per month.4

It drops to 0.25% per month when you filed on time as an individual and have an approved installment agreement in place.4 The 25% total cap still applies.4

Does interest keep adding up on an IRS payment plan?

Yes. A payment plan only cuts the failure-to-pay penalty from 0.5% to 0.25% a month, and only if you filed on time as an individual.4 Interest keeps compounding daily at the full quarterly rate until the balance hits zero.2

That is why paying extra when you can, or paying the whole thing off early, saves real money.

Is the estimated tax penalty the same as the failure to pay penalty?

No. They are two different charges.

The estimated tax penalty (IRC §6654) is for not paying enough during the year through withholding or quarterly payments.10 It is figured from the amount and length of the underpayment, using the IRS quarterly underpayment rates.10 It has no 25% cap.

The failure-to-pay penalty is 0.5% a month on tax still unpaid after the April due date.4

You can owe both on the same return.

Is IRS interest or a tax penalty deductible?

Interest paid to the IRS on your federal income tax is not deductible.15

Penalties are not deductible either. A business usually cannot deduct penalties and fines it pays to a government agency because it broke the law.16

A business can usually deduct interest on business taxes, such as a corporation's federal income tax underpayment.

How long can the IRS collect an unpaid tax bill?

Ten years from the date the tax was assessed.11 After that the debt, plus its penalties and interest, legally goes away.

The clock can pause for things like bankruptcy, an offer in compromise, or time spent living outside the country.11 Interest keeps building the whole time the debt is alive.

Sources

  1. Quarterly interest rates. Internal Revenue Service. Accessed September 26, 2026.
  2. Interest. Internal Revenue Service. Accessed September 26, 2026.
  3. Failure to file penalty. Internal Revenue Service. Accessed September 26, 2026.
  4. Failure to pay penalty. Internal Revenue Service. Accessed September 26, 2026.
  5. Accuracy-related penalty. Internal Revenue Service. Accessed September 26, 2026.
  6. Administrative penalty relief. Internal Revenue Service. Accessed September 26, 2026.
  7. Penalty relief for reasonable cause. Internal Revenue Service. Accessed September 26, 2026.
  8. Topic no. 653, IRS notices and bills, penalties and interest charges. Internal Revenue Service. Accessed September 26, 2026.
  9. Internal Revenue Manual 5.1.2, Remittances, Form 809 and Designated Payments. Internal Revenue Service. 5.1.2.9. Accessed September 26, 2026.
  10. Underpayment of estimated tax by individuals penalty. Internal Revenue Service. Accessed September 26, 2026.
  11. Time IRS can collect tax. Internal Revenue Service. Accessed September 26, 2026.
  12. Time you can claim a credit or refund. Internal Revenue Service. Accessed September 26, 2026.
  13. 26 U.S. Code § 6663 - Imposition of fraud penalty. Legal Information Institute, Cornell Law School. (a). Accessed September 26, 2026.
  14. 26 U.S. Code § 6601 - Interest on underpayment, nonpayment, or extensions of time for payment, of tax. Legal Information Institute, Cornell Law School. (e)(2). Accessed September 26, 2026.
  15. Interest, investment, money transactions. Internal Revenue Service. Accessed September 26, 2026.
  16. Publication 334 (2025), Tax Guide for Small Business. Internal Revenue Service. Expenses You Cannot Deduct. Accessed September 26, 2026.
  17. Revenue Procedure 2024-40. Internal Revenue Service. Section 2.53. Accessed September 26, 2026.
  18. 26 U.S. Code § 6651 - Failure to file tax return or to pay tax. Legal Information Institute. 2026. Accessed October 7, 2026.

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