Oct. 15 was the last day for most people who got an extension to file their 2025 federal income tax return. Anyone who missed it is now filing late, and what that costs depends mostly on one question: whether you owe the IRS money or the IRS owes you.
The extension never covered payment. Tax for 2025 was still due April 15, so anyone with a balance has had interest building for six months, and most have had a late-payment penalty growing too. Filing late adds an even steeper penalty.
A few more weeks of delay can also trigger a flat minimum charge.
If you are owed a refund
The late-filing penalty is 5% of the tax due, after subtracting on-time payments and available credits, for each month or part of a month the return is late. If withholding or estimated payments already covered the bill, you generally have nothing to multiply, so there’s no penalty.
Waiting still costs you the use of your own money, since the IRS cannot send a tax refund for a return it has not received. The law also generally allows only three years to claim one.
If you owe, the clock started in April
Unpaid 2025 tax has been collecting interest since April 15. The IRS’ rate for individual underpayments is 7% a year for the quarter that began Oct. 1, compounded daily.
Unless you qualify for the IRS’ new automatic penalty exemption, explained below, a late-payment penalty of 0.5% a month has been added on top of it.
Filing after the extended deadline also triggers the late-filing penalty. When both apply in the same month, the combined charge is 5%: 4.5% for filing late plus 0.5% for paying late.
The filing penalty tops out after five months, but the payment penalty keeps going until it reaches 25%, for a maximum of 47.5% of the unpaid tax.
Anyone who owes and never requested an extension has been filing late since April 15, 2026, and has already reached the five-month filing-penalty limit.
The 60-day line
Once a return is more than 60 days late, a minimum penalty applies. For returns due in 2026, it is $525 or 100% of the unpaid tax, whichever is less. For a return on a valid extension, the 60 days count from the extended due date, which puts the line at Dec. 14, 2026.
The minimum matters most for small balances. Someone who owes $600 and files 45 days late would face a late-filing penalty of about $54. Once the return is more than 60 days late, that penalty jumps to the $525 minimum.
Check whether your deadline moved
The IRS postpones deadlines for people in federally declared disaster areas, and several 2026 postponements run into 2027.
For example, residents of storm-hit Indiana counties have until Feb. 1, 2027, to file 2025 returns that were on extension. That relief covers filing only; 2025 payments were still due April 15. The IRS keeps a list of disaster relief by state.
File even if you cannot pay
The late-filing penalty is far steeper than the late-payment penalty, so filing without the money is usually cheaper than waiting until you have it.
Individuals who owe less than $100,000 in tax, penalties and interest can apply online for a short-term plan of up to 180 days with no setup fee.
Those who owe $50,000 or less and have filed all required returns can set up a longer payment plan online for $29 with direct debit or $69 with other payment methods. Interest and some penalties keep accruing until you pay the balance.
The Money Talks News tax debt page compares IRS payment plans, collection delays and penalty relief, and explains how to vet a tax-relief company before hiring one.
Check for penalty relief
A clean record may keep the penalties from being charged at all. Starting with 2025 returns, the IRS is replacing first-time abatement with an automatic exemption from late-filing and late-payment penalties for taxpayers who filed the same type of return on time for the prior three years and were not assessed penalties in that span, other than an estimated tax penalty.
The IRS applies it when it processes the return and sends a notice saying so, and no request is needed. Interest on unpaid tax still applies. If you get a penalty notice but believe you qualify, call the number on it. When the IRS removes a penalty, it automatically reduces the interest tied to it.
People who missed the deadline because of a serious illness, a death in the immediate family or a similar event may qualify for relief based on reasonable cause instead.
Dec. 14 is the date to beat
If you have an extension and a balance due, filing by Dec. 14 keeps the minimum penalty off the table, and each month you file sooner trims the percentage penalty.
Retirees who ended up owing may also want to revisit withholding on pensions, Social Security and IRA withdrawals, one of several tax changes that come with retirement, before the 2026 bill arrives.
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