Charged an estimated tax penalty? Check the waiver
You paid too little tax during the year, and the IRS added an estimated tax charge. The underpayment penalty works like interest on each short payment, and there is none if you owe less than $1,000 at filing. First-time removal does not cover it, but a waiver can, and a tax pro can ask for you.
- $1,000
If you owe less than $1,000 when you file, there is no estimated tax penalty.
a little more withholding can make the whole penalty go away.
raise your withholding before year end if you are close.
- 2 years
The waiver covers retiring after age 62 or becoming disabled in the past 2 years, with a good reason.
a recent retirement can wipe out the charge.
send a signed explanation if this fits you.
The safe harbor rules
Imani is a freelance designer. Her 2025 tax was $18,000 and her 2024 tax was $14,000. She paid $9,000 during 2025, which left her short of the safe amount.
The IRS estimated tax penalty page gives two ways to avoid it.
- Your return shows you owe less than $1,000.
- You paid at least 90% of this year's tax, or 100% of last year's, whichever is smaller. Use 110% of last year's if last year's AGI was over $150,000.
For Imani, 90% of $18,000 is $16,200 and 100% of last year is $14,000. The smaller number, $14,000, is her safe amount. She paid $9,000, so she was $5,000 short. The safe harbor page shows how to plan for next year.
Form 2210
Form 2210 is how you figure the penalty yourself, or ask the IRS to waive or lower it. Most people can skip it, because the IRS works out the charge and sends a bill.
The form helps in two cases from the IRS page. One is when most of your tax was withheld early in the year. The other is when your income came in unevenly, such as a large sale in December. The annualized method on Schedule AI may lower the charge.
Asking for a waiver
The IRS says this penalty generally cannot be removed for reasonable cause. It can be removed or lowered in these cases:
- A casualty, a local disaster or another unusual event made the charge unfair.
- You or your spouse retired after reaching age 62, or became disabled, in the past 2 years, and had a good reason.
Send a signed written explanation to the address on your notice. Wrong written advice from the IRS is a separate route, explained on the same IRS page.
Calculator
Enter your two years of tax and what you paid. It starts with Imani's numbers.
Starts with an example: $18,000 of tax this year, $14,000 last year, $9,000 paid. Change any box to see yours.
Example
Safe amount to pay during the year: $14,000
You are short by: $5,000
Rough penalty if the shortfall was spread evenly over the year: about $233. Form 2210 gives the exact figure.
Have this checked. If a penalty notice already came, a licensed tax professional can check the waiver rules and Form 2210 against the $5,000 shortfall.
For late filing or late payment penalties, use the penalty calculator. To check other relief, see IRS penalty removal.
Frequently asked questions
How is the underpayment penalty calculated?
It works like interest on each payment that was short or late, at the IRS underpayment rate. That rate was 7% a year for most of 2025 and 2026.
Who has to pay estimated taxes?
People who expect to owe $1,000 or more at filing after withholding, such as self-employed people, landlords and retirees with investment income.
Does first-time abatement remove the underpayment penalty?
No. First-time removal covers late filing, late payment and late deposits only. The waiver above is the way to ask.
Do I have to file Form 2210?
Usually not. The IRS figures the penalty and sends a bill. You file Form 2210 to ask for a waiver or to use a method that lowers the charge.
What is the safe harbor for estimated tax?
Pay at least 90% of this year's tax or 100% of last year's, whichever is smaller, through the year. It is 110% of last year's if your income was over $150,000. See the safe harbor rule.
Sources
- Underpayment of estimated tax by individuals penalty, irs.gov, checked October 2026.
- About Form 2210, 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 an estimated tax penalty, and the usual first-time route does not work for it. A licensed tax professional can check the waiver rules and Form 2210 for a lower figure, and make the request for you. Call now with the notice and last year's return.
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 tax year and the penalty amount from the notice.