Form 2210: the underpayment penalty explained (2026)

Form 2210 is the IRS form for the underpayment of estimated tax penalty: the charge for not paying enough tax during the year, or paying it late. If you're self-employed and skipped or shorted a quarterly payment, this is the penalty that applies. Most people never have to fill in the form, though, because the IRS works the penalty out and sends a bill.

When the penalty applies

For 2026, you can owe the penalty if your withholding plus on-time estimated payments came to less than the smaller of:

1. 90% of your 2026 tax, or
2. 100% of your 2025 tax, or 110% if your 2025 adjusted gross income was over $150,000 ($75,000 if married filing separately). Your 2025 return has to cover a full 12 months.

That's the safe harbor. You owe no penalty at all if either of these is true:

• Your 2026 tax, minus withholding, comes to less than $1,000.
• You had no tax liability for 2025, you were a US citizen or resident all year, and your 2025 return covered 12 months.

How the penalty is worked out

The penalty works like interest. The IRS takes the amount you were short for each due date and charges the underpayment interest rate for every day it stayed unpaid. That rate is the federal short-term rate plus 3 percentage points, and it's set every quarter.

Period	Rate
January to March 2026	7%
April to June 2026	6%
July to September 2026	7%
October to December 2026	7%

Three rules make it stricter than it sounds:

• Each due date counts separately. You can owe a penalty for April even if you paid extra later in the year, and even if you're due a refund when you file.
• Late payments fill the oldest gap first. A payment you send in September goes toward any shortfall from April or June before it counts for September, even if you label it for September.
• Withholding counts as paid evenly across the four due dates unless you choose otherwise. If you also have a W-2 job, raising withholding late in the year can cover a missed payment from earlier on.

An example

Jordan's required payment is $2,500 a quarter. Jordan missed the June 15, 2026 payment, then caught up by paying $5,000 on September 15.

The September payment goes to June's $2,500 first. So June's shortfall was unpaid for 92 days: 15 days at 6% (June 16 to 30) and 77 days at 7% (July 1 to September 15).

$2,500 × (15 ÷ 365 × 6% + 77 ÷ 365 × 7%) = about $43.

That's not a disaster, but it's money for nothing. Missing all four payments on a $10,000 tax bill would cost several hundred dollars.

Work out your penalty

The calculator starts with Jordan's numbers. Change them to yours. It uses the regular method and assumes each payment went in on its due date. There's also a full-page version.

Do you need to file Form 2210?

Usually not. The IRS says it "will generally figure your penalty for you and you should not file Form 2210." If you owe a penalty, it sends a bill. Tax software also works it out and can add it to your return.

You do have to file Form 2210 with your return if you want to:

• Ask for a waiver (see below).
• Use the annualized income installment method (Schedule AI). It helps if your income was uneven, for example most of it arriving late in the year, because it lowers the payments that were due early. If you use it for one due date, you have to use it for all of them.
• Treat withholding as paid on the actual dates it was taken out, instead of spread evenly.

Waivers

The IRS can reduce or remove the penalty if:

• the underpayment was caused by a casualty, disaster or other unusual circumstance, and charging the penalty would be unfair, or
• you retired after reaching age 62, or became disabled, during the tax year or the year before, and the underpayment had a reasonable cause.

Ordinary reasonable cause isn't enough on its own, which makes this penalty different from most IRS penalties. If your underpayment came from a federally declared disaster, the instructions say you generally shouldn't file Form 2210 at all.

Farmers and fishers

If at least two-thirds of your gross income comes from farming or fishing, the 90% becomes 66⅔%, and you make a single payment by January 15. You also owe no penalty at all if you file and pay everything you owe by March 1.

The January payment exception

You can skip the January 15, 2027 payment without a penalty if you file your 2026 return by February 1, 2027 and pay the whole balance with it.

State penalties

Most states that tax income charge their own underpayment penalty too, with different rules. California wants 30%, 40%, 0% and 30% of the year's tax on the four dates. New York charges a higher rate than the IRS. New Jersey only needs 80% of this year's tax.

How to avoid it next time

Work out your safe-harbor amount once at the start of the year, divide it by four, and pay it on each due date. The 1099 tax calculator compares the safe-harbor options and shows your next payment. The Paid & Filed workbook does the same from your real transactions and keeps a log of what you've paid, so you can see before each due date whether you're covered.