An extension to file is not an extension to pay tax.
A valid extension removes the failure-to-file penalty exposure if the return is filed by the extended date. It does not remove the failure-to-pay penalty or interest on any tax not paid by the original due date.
Generally 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25%, if the return is filed after the due date (including extensions) without reasonable cause. A timely, valid extension that is honored by filing the return before the extended due date avoids this penalty entirely, regardless of when the tax is paid.
Generally 0.5% of the unpaid tax for each month or part of a month the tax remains unpaid after the due date, up to a maximum of 25%. This penalty applies from the original due date even when a valid filing extension is in place, because an extension to file is not an extension to pay. If both the failure-to-file and failure-to-pay penalties apply for the same month, the failure-to-file penalty is reduced by the failure-to-pay penalty amount for that month under IRC §6651(c)(1).
Interest accrues on any underpayment from the original due date until paid, regardless of any extension, under IRC §6601. The rate is determined quarterly under IRC §6621 and, for noncorporate taxpayers, equals the federal short-term rate plus 3 percentage points, compounded daily. As of the fourth quarter of 2026 (October 1 - December 31, 2026), the individual underpayment rate is 7% per year, compounded daily, per Rev. Rul. 2026-15.
| Charge | Rate | Stopped by a valid extension? |
|---|---|---|
| Failure to file, IRC §6651(a)(1) | 5%/month, max 25% | Yes, if filed by the extended date |
| Failure to pay, IRC §6651(a)(2) | 0.5%/month, max 25% | No - runs from original due date |
| Interest, IRC §6601/§6621 | Federal short-term rate + 3% (noncorporate), set quarterly; 7% for Q4 2026 | No - runs from original due date |