All taxpayers who missed Monday’s April 18 tax-filing deadline should file as soon as possible. While taxpayers due a refund receive no penalty for filing late, those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest.
Families who don’t owe taxes to the IRS can still file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025, without any penalty. This year also marks the first time in history that many families with children in Puerto Rico will be eligible to claim the Child Tax Credit, which has been expanded to provide up to $3,600 per child.
Some taxpayers automatically qualify for extra time to file and pay taxes due without penalties and interest, including:
- Members of the military who served or are currently serving in a combat zone. They may qualify for an additional extension of at least 180 days to file and pay taxes.
- Support personnel in combat zones or a contingency operation in support of the Armed Forces. They may also qualify for a filing and payment extension of at least 180 days.
- Taxpayers outside the United States. U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico, including military members on duty who don’t qualify for the combat zone extension, may qualify for a 2-month filing and payment extension.
- Some disaster victims. Those who qualify have more time to file and pay what they owe.
File without penalty to get a tax refund
Some people may choose not to file a tax return because they didn’t earn enough money to be required to file. But they may miss out on receiving a refund. The only way to get a refund is to file a tax return. There’s no penalty for filing after the April 18 deadline if a refund is due.
While most tax credits can be used to reduce the tax owed, there are a few credits that allow taxpayers to receive money beyond what they owe. The most common examples of these refundable credits are the Earned Income Tax Credit, Child and Dependent Care Credit and Child Tax Credit. Those who don’t usually file and didn’t qualify for a third-round Economic Impact Payment or got less than the full amount may be eligible to claim the 2021 Recovery Rebate Credit when they file their 2021 tax return. Taxpayers often fail to file a tax return and claim a refund for these credits and others for which they may be eligible.
File to reduce penalties and interest
Taxpayers should file their tax return and pay any taxes they owe as soon as possible to reduce penalties and interest. An extension to file is not an extension to pay. An extension to file provides an additional six months with a new filing deadline of October 17. Penalties and interest apply to taxes owed after April 18 and interest is charged on tax and penalties until the balance is paid in full.
Filing and paying as much as possible is key because the late-filing penalty and late-payment penalty add up quickly.
Even if a taxpayer can’t afford to immediately pay the full amount of taxes owed, they should still file a tax return to reduce possible delayed filing penalties. The IRS offers a variety of options for taxpayers who owe the IRS but cannot afford to pay.
Usually, the failure to file penalty is 5% of the tax owed for each month or part of a month that a tax return is late, up to five months, reduced by the failure to pay penalty amount for any month where both penalties apply. If a return is filed more than 60 days after the due date, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less.
The failure to pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month until the tax is fully paid or until 25% is reached. The rate is subject to change. For more information see the Penalties page on IRS.gov.
Taxpayers may qualify for penalty relief if they have filed and paid timely for the past three years and meet other important requirements, including paying or arranging to pay any tax due. For more information, see the first time penalty abatement page on IRS.gov.
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