What a tax extension does, and what it doesn’t
An extension is a promise to file later, not permission to pay later. Getting that difference right is what keeps an extension free.
Reviewed October 30, 2026 against IRS.gov guidance. How we check facts.
It does
- Give you until October 15, 2027 to file a 2026 return
- Stop the 5%-a-month failure-to-file penalty
- Cost nothing
- Work automatically, with no reason required
It doesn’t
- Give you more time to pay
- Stop interest on unpaid tax
- Always cover your state return
- Extend the deadline for IRA contributions
Two penalties, two different deadlines
The IRS charges two separate penalties, and the extension only helps with one:
- Failure to file: 5% of the unpaid tax for each month or part of a month the return is late, up to 25%. A timely extension moves this deadline to October 15.
- Failure to pay: 0.5% of the unpaid tax for each month or part of a month, up to 25%. This always runs from April 15.
When both apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount, so the combined charge is 5% a month. A return filed more than 60 days late also carries a minimum penalty, which the IRS adjusts for inflation each year.
The 90% rule
If you file a timely extension and pay at least 90% of your total tax by April 15, the IRS generally treats you as having reasonable cause for the extension period, and the late-payment penalty doesn’t apply, as long as you pay the rest when you file by October 15. Interest still runs on the unpaid 10%.
Interest
Interest on unpaid tax is the federal short-term rate plus 3 percentage points, set every quarter and compounded daily. For the fourth quarter of 2026 it is 7% a year. Interest can’t be waived for reasonable cause.
Missed the deadline?
File and pay as soon as possible: every month counts. If you have a good record, ask about first-time penalty abatement; reasonable-cause relief is also available for things like serious illness or disaster. Try our estimator to see the numbers.