How are interest and penalties computed?
Prior to January 01, 2006, interest accrued at the rate of one and one quarter percent a month or 15 percent per annum from the date the return is required by law to be filed until the date the tax is paid. Beginning January 01, 2006 the rate of interest is subject to change annually. The rates can be found on the website by accessing form number R-1111. For failure to file a return on time, a penalty of 5 percent of the tax accrues if the delay in filing is not more than 30 days. An additional 5 percent penalty accrues for each additional 30 days or fraction thereof during which the failure to file continues, not to exceed a total of 25 percent. For failure to pay the tax in full by the date the return is required by law to be filed, determined without regard to any extension of time for filing the return, a penalty of 0.5 percent of the tax not paid accrues for each 30 days during which the failure to pay continues, not to exceed a total of 25 percent.
Interest is computed at the rate of 15 percent per annum from the date the return is required by law to be filed until the date the tax is paid. For failure to file a return on time, a penalty of 5 percent of the tax accrues if the delay in filing is not more than 30 days. An additional 5 percent penalty accrues for each additional 30 days or fraction thereof during which the failure to file continues, not to exceed a total of 25 percent. For failure to pay the tax in full by the date the return is required by law to be filed, determined without regard to any extension of time for filing the return, a penalty of 0.5 percent of the tax not paid accrues for each 30 days during which the failure to pay continues, not to exceed a total of 25 percent.
