What Happens if I Pay My Taxes a Day Late? Fees, Interest, and Next Steps
Paying taxes a day late can lead to small penalties and interest; learn how to minimize impact and handle the situation responsibly.
Missing the tax deadline by even a single day can feel like a minor oversight, but it may trigger consequences from the Internal Revenue Service. Understanding what happens when you pay late is important for minimizing the financial impact.
This article explains the potential fees, interest charges, and steps to take if you’ve paid your federal income taxes one day past the deadline.
Potential Fees and Penalties
Paying your federal income tax liability even one day late can result in a Failure to Pay penalty, as outlined in Internal Revenue Code Section 6651. The IRS calculates this penalty based on the tax amount remaining unpaid after the due date shown on your return.
The penalty is 0.5% of the unpaid tax for each month, or part of a month, that the tax remains outstanding. Because this applies even to a partial month, paying just one day late typically triggers the 0.5% rate for that first month. For instance, owing $5,000 and paying it one day late would generally result in a $25 penalty (0.5% of $5,000) for that partial month.
This penalty accrues monthly on the unpaid balance but cannot exceed 25% of your total unpaid tax liability.1Internal Revenue Service. Failure to Pay Penalty It applies specifically to the failure to pay the tax shown on a filed return by the deadline. If the IRS later determines you owe additional tax not reported on your return, a similar penalty structure applies after the due date specified in the IRS notice demanding payment.
Taxpayers may also face penalties for late payments at the state level. State tax agencies have their own penalty structures, which can vary significantly. It is advisable to check with your specific state’s department of revenue for details on their late payment rules.
Interest on Late Tax Payments
In addition to penalties, interest accrues on late tax payments. The IRS is required by law, under Internal Revenue Code Section 6601, to charge interest on unpaid tax liabilities starting the day after the deadline until the payment is received in full.
The interest rate on underpayments is determined quarterly. According to Internal Revenue Code Section 6621, the rate for most individuals is the federal short-term rate plus three percentage points. For example, the IRS announced an annual interest rate of 7% for underpayments by non-corporate taxpayers for the first two quarters of 2025.2Internal Revenue Service. Quarterly Interest Rates This rate can change quarterly.
Interest charged by the IRS compounds daily, meaning it’s calculated on the original unpaid tax plus any accumulated interest. Even paying one day late means interest will be calculated for that day. While the interest for a single day might seem small, daily compounding increases the total amount owed more rapidly over time.
State tax authorities also charge interest on unpaid state income taxes. The specific rates and calculation methods vary by state, but interest generally begins accruing from the original tax due date. Consult your state’s department of revenue for their interest policies.
Requesting Extra Time to Pay
If you anticipate difficulty paying your tax liability by the deadline, the IRS offers options to request more time. An extension to file your tax return, typically requested using Form 4868, does not grant additional time to pay. Payments are generally still due by the original deadline, usually April 15th, even with a filing extension to October 15th.
For those needing more time specifically for payment, the IRS provides formal arrangements. A short-term payment plan allows up to 180 additional days from the original deadline to pay the full balance. Individuals owing less than $100,000 (combined tax, penalties, interest) can often request this online via the IRS’s Online Payment Agreement (OPA) tool or by phone, usually without a setup fee if requested online.
If more than 180 days are needed, a long-term payment plan, or Installment Agreement, allows monthly payments for up to 72 months.3Internal Revenue Service. Payment Plans; Installment Agreements Individuals owing $50,000 or less who have filed all required returns can typically apply online using the OPA tool for immediate approval notification. Businesses owing $25,000 or less can also apply online for plans up to 24 months.
Taxpayers exceeding these online thresholds, or needing different terms, can request an installment agreement by submitting Form 9465, Installment Agreement Request, by mail or sometimes by phone. Setup fees apply for agreements established via Form 9465 or phone, though fees may be reduced or waived for low-income taxpayers, especially those using direct debit.
In cases of significant financial hardship, an Offer in Compromise (OIC) might be possible. This agreement allows taxpayers to resolve their tax liability for less than the full amount owed, typically based on doubt as to collectibility. Applicants submit Form 656 and detailed financial information (Form 433-A for individuals, 433-B for businesses). An application fee and initial payment are usually required, though waivers exist for low-income taxpayers. Eligibility requires current tax compliance and no open bankruptcy proceedings. The IRS offers an OIC Pre-Qualifier tool online.
State tax authorities often provide similar payment options, like installment agreements or short-term extensions. Eligibility, procedures, duration, and fees vary by state. Contact your state’s department of revenue for details on available programs.
Submitting Payment After the Due Date
Even if you miss the deadline by a day, submit your payment as soon as possible. The IRS offers several payment methods, with electronic options being the fastest.4Internal Revenue Service. Topic No. 202, Tax Payment Options
Common payment methods include:
- IRS Direct Pay: Allows direct bank account payments via the IRS website without prior registration. Requires identity verification using prior-year tax info. Limits may apply (e.g., two payments per 24 hours).
- Electronic Federal Tax Payment System (EFTPS): A free Treasury service requiring enrollment (PIN mailed). Allows online or phone payments 24/7, scheduling up to 365 days in advance, and access to longer payment history. Supports various federal taxes.
- Debit Card, Credit Card, or Digital Wallet: Processed via third-party providers authorized by the IRS. These processors charge fees (flat fee for debit, percentage for credit). Payments are made online or by phone through the processor.
- Check, Money Order, or Cashier’s Check: Mail payment payable to “U.S. Treasury” to the address on your notice or form instructions. Include your name, address, phone, SSN (listed first on joint returns), tax year, and form number (e.g., “2024 Form 1040”) on the payment. Consider including Form 1040-V if filing electronically but paying by mail. Do not send cash. Mailed payments take longer to process.
Regardless of the method, prompt payment is key. State tax authorities also offer various payment methods, often including online portals and mail options; check your state’s revenue department website for specifics.
Correcting Errors on a Late Payment
If you discover an error after submitting a late payment, take steps to correct it.
If you paid less than the total amount due, remit the remaining balance as soon as possible to minimize further interest and penalties. This correction doesn’t negate consequences from the initial lateness.
If you accidentally overpaid, the IRS generally identifies this during processing. Under Internal Revenue Code Section 6402, the IRS may apply the overpayment to other outstanding federal tax debts. Otherwise, a refund is typically issued automatically. You usually don’t need to act unless you want the overpayment applied to next year’s estimated taxes. Contact the IRS if an overpayment isn’t resolved as expected.
For misapplied payments (e.g., wrong tax year, SSN/EIN, or tax form), contact the IRS directly by phone (individuals: 1-800-829-1040; businesses: 1-800-829-4933). Provide details like payment date, amount, confirmation number, and the correct application information. Having proof of payment (bank statement, canceled check copy) is helpful. IRS agents can often locate and reapply payments correctly, ensuring credit as of the original receipt date.
State tax authorities generally have similar processes for correcting payment errors. Contact your specific state’s department of revenue for instructions on handling underpayments, overpayments, or misapplied state tax payments.