How are penalty and interest calculated?
No penalty is charged if 90% of the correct tax is paid by the original due date of the return. A penalty of 10% will be added to the tax due if the tax return is not filed by the due date and at least 90% of the correct tax is not paid by that date. If the return is filed timely but you cannot pay the tax in full, a penalty of 5% will be added to the additional tax due if at least 90% of the correct tax is not paid by the due date. The interest rate may change yearly. Interest must be added to delinquent tax at a per month rate, beginning on the due date of the return and accruing each month until you make full payment of any or all tax, penalty and interest due.
No penalty is charged if 90 percent of the correct tax is paid by the original due date of the return. A penalty of 10 percent will be added to the tax due if the tax return is not filed by the due date and at least 90 percent of the correct tax is not paid by that date. If the return is filed timely but you cannot pay the tax in full, a penalty of 5 percent will be added to the additional tax due if at least 90 percent of the correct tax is not paid by the due date. NOTE: You will never be subject to both the 5 percent and 10 percent penalties. The penalty will be the applicable 5 percent or 10 percent, but not a total of 15 percent. The interest rate may change yearly. Interest must be added to delinquent tax at a per month rate, beginning on the due date of the return and accruing each month until you make full payment of all tax, penalty, and interest due.
