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Ballpark TaxEst. 2026 · Free tools

IRS underpayment penalty calculator

The underpayment penalty is interest on what you were short, charged from each quarter's own due date. This shows where you fell behind and what it costs.

Estimated penalty

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Enter what you expect to owe this year to see whether you are exposed to an underpayment penalty.

Safe harbour target
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Based on
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Required per quarter
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Total paid in
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Total federal tax you expect to owe this yearIncome tax plus self-employment tax for the whole year.
Total tax on last year's returnUnlocks the prior-year safe harbour, which is often a much lower target.
Last year's adjusted gross incomeAbove $150,000 the prior-year target rises from 100% to 110%.
Federal tax withheld from wages this yearWithholding counts as paid evenly across the year, whenever it actually happened.
Estimated payment made in Q1Due April 15, 2026.
Estimated payment made in Q2Due June 15, 2026.
Estimated payment made in Q3Due September 15, 2026.
Estimated payment made in Q4Due January 15, 2027.
Q1: short by ——
Q2: short by ——
Q3: short by ——
Q4: short by ——
Total penalty—

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How this is worked out

This is a simplified version of the IRS's Form 2210 calculation. The penalty is really interest on each quarter's shortfall, so the calculator works quarter by quarter.

First it sets the amount you needed to pay: the lesser of 90% of this year's tax or 100% of last year's (110% if last year's AGI was over $150,000), divided into four equal instalments. Withholding from a job is spread evenly across the four quarters, however it was actually taken, which is how the IRS treats it by default. Any overpayment in one quarter is carried forward to the next.

Each quarter's shortfall is then charged interest from its due date to 15 April 2027, the filing deadline, at the IRS rate for each stretch of time: 7% a year, except 6% from April to June 2026. The rate from January 2027 has not been announced yet, so the calculator assumes it stays at 7%. If last year's tax was $16,000 and you skipped the April payment but paid $4,000 in each of the other three quarters, the $4,000 April shortfall runs for 365 days (77 at 6%, 288 at 7%) and the penalty is about $272.

The penalty is simple interest, which is also how Form 2210 works it out; unlike interest on unpaid tax, it is not compounded. The calculator assumes any shortfall is paid when you file, so paying a missed instalment early will make the real penalty smaller.

No penalty applies if you owe less than $1,000 after withholding and credits, or if you had no tax liability at all last year and were a US citizen or resident for the whole year. If most of your income arrived late in the year, the annualised method on Schedule AI of Form 2210 can reduce or remove the penalty.

Sources

Common questions

What is the IRS underpayment penalty rate for 2026?

7% a year for individuals, except April to June 2026, when it was 6%. It is charged as simple interest on the amount you were short, from each quarterly due date until you pay or until the filing deadline.

How do I avoid the estimated tax penalty?

Pay the lesser of 90% of this year's tax or 100% of last year's — 110% if last year's AGI topped $150,000 — spread across the four quarters. Hit that and no penalty applies however much you end up owing.

Can I fix an early shortfall later in the year?

With withholding, yes: it counts as paid evenly across the year whenever it actually happened, so increasing it in December can repair a January gap. A late estimated payment cannot do the same.

How is the IRS underpayment penalty calculated?

Each quarter is checked on its own. The IRS takes what you should have paid by that due date, subtracts what you actually paid, and charges interest on the gap at its quarterly rate until the gap is paid or the return is due. The quarterly penalties are then added together on Form 2210.

Is there no penalty if I owe less than $1,000?

Yes. If the tax you owe after withholding and refundable credits is under $1,000, no underpayment penalty applies, whatever you paid during the year.

Can the IRS waive the underpayment penalty?

Sometimes. The IRS can waive it if the shortfall came from a casualty, disaster or other unusual circumstance, or if you retired after reaching 62 or became disabled in the year or the year before and the shortfall had a reasonable cause. You ask for the waiver on Form 2210.

Do I have to file Form 2210 myself?

Usually not. In most cases the IRS works out the penalty and sends you a bill. You only need to file Form 2210 to ask for a waiver, to use the annualised income method, or to treat withholding as paid on the dates it was actually taken.

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Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.