The 2026 estimated tax underpayment penalty, figured by quarter
The penalty for paying estimated tax late works like interest on each missed installment. Enter what you owed and what you paid on each date to see the charge.
Estimated penalty if the rest is paid April 15, 2027
$313
Interest-like charge at the IRS underpayment rate, quarter by quarter
| Short on payment 1 | $0 → $0 |
| Short on payment 2 | $4,000 → $116 |
| Short on payment 3 | $2,000 → $128 |
| Short on payment 4 | $0 → $69 |
Computed by Radif Partners from IRS documents for tax year 2026 · How we calculate · no email asked, nothing sold
The underpayment penalty is an interest-like charge on each estimated tax installment that was paid late or short, counted day by day from its due date until it is paid. It is figured on Form 2210, separately for each of the four periods, at the IRS underpayment rate: 7 % for the first quarter of 2026, 6 % for the second, 7 % for the third and 7 % for the fourth. The rate for January to March 2027 is not published yet, so the calculator applies the last known rate, 7 %, to that stretch. Missing $3,000 on the April 15, 2026 installment and paying it on April 15, 2027 costs about $204; the same shortfall on the January 15, 2027 installment costs about $52. No penalty applies if you owe less than $1,000 or met a safe harbor. The IRS may waive it after a casualty or disaster, or for someone who retired after 62 or became disabled.
Despite its name, this penalty behaves like interest. Form 1040-ES describes it as a charge imposed on each underpayment for the number of days it remains unpaid. That has two practical effects. A payment made late still stops the meter on the day it arrives, so catching up in October is far cheaper than waiting for the return. And the charge can apply even when the return ends up showing a refund, because what counts is how much was in by each deadline, not the year's total (Pub 505, chapter 2).
Above $150,000 of AGI: the 110% rule
110% safe harbor for 2026
$44,000
| Per quarter | $11,000 |
| Extra over 100% | $4,000 |
When the penalty applies at all
Two tests come first. If the balance due with the return, after withholding and refundable credits, is under $1,000, there is no penalty. If your payments reached the safe harbor, the smaller of 90 % of the 2026 tax or 100 % of the 2025 tax (110 % above $150,000 of 2025 AGI), in the right amounts by the right dates, there is none either. The safe harbor page works through those thresholds. Only when both tests fail does Form 2210 come into play.
How Form 2210 prices a missed installment
The form starts from the required annual payment and splits it into four required installments, one quarter each under the regular method. For each period it compares what was required with what you paid by that due date. Any shortfall accrues the underpayment rate for every day it stays open, and the rate itself can change from one calendar quarter to the next. The IRS sets it each quarter and publishes it on its quarterly interest rates page.
| Days counted in | Underpayment rate | Status |
|---|---|---|
| January 1 to March 31, 2026 | 7 % | Published |
| April 1 to June 30, 2026 | 6 % | Published |
| July 1 to September 30, 2026 | 7 % | Published |
| October 1 to December 31, 2026 | 7 % | Published |
| From January 1, 2027 | 7 % | Not yet published: last known rate assumed |
The rate for the first quarter of 2027 matters because a fourth-installment shortfall, and every earlier one still open, keeps accruing until the return is filed. As of the date this page was checked, the IRS had not announced it. The calculator therefore uses 7 % for days after December 31, 2026, and the figure will be replaced once the IRS publishes the actual rate.
What $3,000 costs, depending on which installment
| Shortfall on | Amount | Days to April 15, 2027 | Penalty |
|---|---|---|---|
| Installment 1, due April 15, 2026 | $3,000 | 365 | $204 |
| Installment 2, due June 15, 2026 | $3,000 | 304 | $174 |
| Installment 3, due September 15, 2026 | $3,000 | 212 | $122 |
| Installment 4, due January 15, 2027 | $3,000 | 90 | $52 |
The earlier the miss, the higher the cost, simply because the shortfall stays open longer. Being $2,000 short on all four installments and paying the whole $8,000 with the return costs about $367. Set against the tax itself, the charge is modest, but it buys nothing and is easy to avoid with the safe harbor.
Payments that come in late
The calculator above works from what you actually sent on each date. A later payment covers the oldest unpaid installment first, which stops the clock on that shortfall from the day you paid. So a September 15, 2026 payment large enough to catch up on June ends the June penalty in September, and only the remainder rolls forward.
Refiguring after a good month
Pub 505 flags a trap for people who raise their payments partway through the year. If you started with equal installments and then increase the later ones because income jumped, the earlier periods can still show an underpayment, since each one is measured against a quarter of the final required amount. The publication points to Schedule AI as the way to avoid or reduce that charge: income that only arrived in the summer does not need to have been paid for in April. Keeping month-by-month profit figures makes the schedule possible to complete.
Waivers the IRS can grant
IRS Topic 306 lists two cases in which the penalty may be waived:
- the payment was missed because of a casualty, a disaster or another unusual circumstance, and charging the penalty would be inequitable;
- you retired after reaching age 62, or became disabled, during the tax year or the year before, and the underpayment came from reasonable cause rather than willful neglect.
A waiver is requested with Form 2210, following its instructions. Form 1040-ES also notes a narrow waiver tied to an election under section 1062 for the sale of qualified farmland to a qualified farmer.
The annualized method as a defense
A business whose income piles up late in the year can look underpaid under equal installments when it was not. Schedule AI of Form 2210, the annualized income installment method, recomputes each required installment from the income actually earned through the end of each period. A landscaper whose income arrives between May and October can see the April installment shrink or disappear. Anyone using the method must file Form 2210 with Schedule AI, even when the result is no penalty at all. The quarterly tax guide explains how to size payments with it during the year.
Letting the IRS do the math
Pub 505 notes that the IRS can generally figure the penalty for you and send a bill, so filling in Form 2210 is not mandatory in the simple case. It becomes worth doing when you claim a waiver, use the annualized method, or paid unevenly and want each payment credited on its real date. The calculator gives a close estimate for planning; the IRS computation on the notice is the one that counts. To avoid the question next year, size the installments on the due dates calendar.