What is the current underpayment penalty rate?

The IRS adjusts the underpayment rate quarterly. It is the federal short-term rate (set by IRS each quarter) plus 3 percentage points. As of 2024, the rate is approximately 8% annualized.

How is the penalty calculated?

Penalty = Underpayment multiplied by Rate multiplied by (Days Underpaid / 365). It applies per quarter from the due date of the missed payment to the earlier of the date paid or April 15.

Are there exceptions to the underpayment penalty?

Yes: if total tax owed is under $1,000; if you had no tax liability in the prior year; if you meet the safe harbor (100%/110% of prior year); or if you qualify for a hardship waiver.

Tax Underpayment Penalty Calculator

Estimate IRS underpayment penalty (Form 2210). Rate = federal short-term rate + 3% (currently ~8%). Applied per quarter to the underpayment amount from due date to payment date.

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Frequently Asked Questions

What is the current underpayment penalty rate?

How is the penalty calculated?

Are there exceptions to the underpayment penalty?