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1. How is penalty and interest calculated?
You will owe penalty and interest for late payment of tax if you pay after the due date. The filing due date is April 18, 2023 for the 2022 tax return.
Penalty accrues monthly at 1 percent of the tax due, and increases by an additional 1 percent per month, or fraction thereof (e.g., penalty on a $500 tax due will be $30 if the tax is unpaid for six months).
The interest rate is 1 percent above the adjusted prime rate and is adjusted on January 1 and July 1 of each year. Interest is charged from the original due date of the return to the date the balance of the tax is paid. View current interest rate.
Typically, if you owe more than $100, you are required to make estimated payments. You may owe penalty and interest for underpayment, late payment or for failing to make estimated tax payments. Treasury will compute your penalty and interest and send you a bill.