Iowa may assess penalties and interest if a taxpayer does not file a return by the due date, does not pay the tax due by the due date, or does not make sufficient estimated tax payments when required. Penalties and interest are administered by the Iowa Department of Revenue in accordance with Iowa law.
Change Interest on Delinquent Tax to – Penalty
Late Filing Penalty: you owe an additional 5% of the unpaid tax if
- You do not file your return by the due date and
- You paid less than 90% of the correct tax,
Late payment Penalty: you owe an additional 5% of the unpaid tax if
- If you file your return on time but
- paid less than 90% of the correct tax due
Taxpayers may be subject to both the 5% failure to timely file penalty and the 5% failure to timely pay penalty.
If 90% of the correct tax due is paid by the due date, then no penalty is due.
Interest
Interest must be added to delinquent tax. Interest is added at a rate determined annually on a per month after the due date of the return (April 30) and accrues each month until paid in full. Part of a month constitutes a whole month, so if you pay the tax on June 3, you are late for May and June.
Penalty Relief and Waivers
Penalties can be waived under limited circumstances, as described in Iowa Code section 421.27. Complete and submit a Penalty Waiver Request form (78-629) to request a penalty be waived.
Important Notes
- Penalties and interest are separate from the underlying tax liability
- Interest continues to accrue until full payment is made
- Iowa does not apply a single flat penalty or interest rate for all situations; rates and penalties depend on the type of noncompliance
Source:
Form IA 1040
Form IA 2210F
Form IA 2210
Disclaimer: Always verify details with the official Iowa Department of Revenue forms and instructions. This information is for general guidance and may not apply to your specific situation. For complex tax matters, consult a CPA or tax attorney.