Paid late? Your late payment penalty can come off
You filed but could not pay in full, and now the bill grows every month. The IRS late payment penalty is 0.5% of your unpaid tax a month, up to 25%, and it drops to 0.25% on a payment plan. It can also be removed, and a tax pro can ask for you.
- 10 days
After a notice of intent to levy, you have 10 days before the rate goes to 1% a month.
the penalty doubles if that notice sits in a drawer.
call the number on the levy notice before day 10.
- 3 years
Already paid the penalty? The Form 843 instructions say you generally must claim within 3 years after filing the return or 2 years after paying, whichever is later.
for example, a return filed August 14, 2025 and paid that day has until August 14, 2028.
check both dates on your records before you call or mail the form.
- 0.25%
On an approved payment plan, the rate is 0.25% a month if you filed on time.
a plan halves the penalty from the first month.
apply for a plan as soon as you know you cannot pay in full.
The rate and the cap
Daniel filed his 2024 return on time but could not pay the $6,000 he owed. Each month adds $30 in penalty. After 12 months, that is $360, plus interest.
The IRS failure to pay page gives the rules. The charge is 0.5% for each month or part of a month. It stops at 25% of the unpaid tax, and the IRS charges a full month even if you pay partway through.
| Daniel, $6,000 unpaid | Penalty |
|---|---|
| 1 month | $30 |
| 12 months | $360 |
| Cap (25%) | $1,500 |
Two things make it worse. If you also filed late, the late filing penalty runs too. If you don't pay within 10 days of a notice of intent to levy, the rate goes to 1% a month.
Lower rate on a payment plan
If you filed on time as an individual and the IRS approves a payment plan, the rate halves to 0.25% a month. For Daniel, that cuts the monthly charge from $30 to $15 at the start.
The IRS payment plans page explains how to apply online. Interest still runs on the balance while you pay.
Getting it removed
Late payment is covered by first-time removal if your 3 earlier years were clean. A reason outside your control may also work, but the IRS says not having the money is not enough on its own. See reasons the IRS accepts.
When the penalty comes off, the IRS removes the interest on it too. The tax and its own interest stay.
Since summer 2026: for 2025 returns and later, the IRS skips this penalty on its own if your 3 earlier years were clean. The IRS news release of July 8, 2026 says some people will still get notices during the change, and they can call and ask.
Calculator
Enter your tax and dates below. It starts with a $4,000 example paid four months late.
Starts with an example: $4,000 owed on a 2024 return, filed and paid on August 14, 2025. Change any box to see yours.
Example
If both penalties come off, you save $817the penalties plus the interest charged on them
Late filing penalty: $720 (4 months late)
Late payment penalty: $80 (4 months unpaid)
Interest to the pay date: $111
Total with the tax: $4,911
An estimate from the IRS rates. It leaves out interest on the late payment penalty, which the IRS starts from its notice date.
Have these numbers reviewed. Interest keeps growing on unpaid penalties, even after the tax itself is paid. A licensed tax professional can check whether the $817 in penalties and interest can come off, and ask the IRS for you.
For the late filing side, see the late filing penalty. The full calculator shows interest step by step.
Frequently asked questions
What is the penalty for paying taxes late?
0.5% of the unpaid tax for each month or part of a month, up to 25%. It drops to 0.25% on an approved payment plan if you filed on time.
Does the IRS charge interest on top of the penalty?
Yes. Interest runs on the unpaid tax and on the penalty, and it adds up every day. The rate was 7% a year for the fourth quarter of 2026.
What happens after a notice of intent to levy?
If you don't pay within 10 days of that notice, the late payment penalty rises to 1% a month. Call the number on the notice before the 10 days run out.
Is the late payment penalty charged for a partial month?
Yes. The IRS charges a full month's 0.5% even if you pay early in that month.
Can the late payment penalty be removed?
Yes, by first-time removal or a good reason. See IRS penalty removal to check which fits.
Sources
- Failure to pay penalty, irs.gov, checked October 2026.
- Payment plans, irs.gov, checked October 2026.
- Quarterly interest rates, irs.gov, checked October 2026.
What to do now
Talk it through by phone
Your notice shows a late payment penalty, and it grows each month the tax stays unpaid. A licensed tax professional can ask the IRS to remove the penalty already charged and set up a plan that lowers the rate. Call now with the notice and the balance you owe.
A licensed tax professional answers during business hours. The call costs nothing, and you are not signing up for anything. Form 843 Help is a private service, not the IRS, and your details go to one tax professional only.
- You call during business hours and say which penalty and tax year you are looking at.
- A licensed tax professional reads your notice with you and checks first-time removal and reasonable cause.
- You hear the options and the fee for filing before you agree to anything.
Or send the details about your penalty
You would rather write than call about your penalty for . A request that names the wrong rule or misses a year can be turned down, so a licensed tax professional checks it first. Send the penalty amount and the tax year from the notice.