Two separate penalties can start, not one — a penalty for filing late and a penalty for paying late. They are charged under different rules and one does not cancel the other.
The single most useful fact: in the United States, filing late costs about ten times what paying late costs. So if the choice is between filing a return you cannot pay and not filing at all, file.
United States (IRS Topic No. 653, last updated 27 February 2026):
- Failure to file — 5% of the unpaid tax for each month or part month the return is late, capped at 25%. Filing stops it accruing.
- Failure to pay — 0.5% of the unpaid tax per month or part month, also capped at 25%. It keeps running on whatever is unpaid, filed or not. It rises to 1% per month from 10 days after a notice of intent to levy, and falls to 0.25% per month while an instalment agreement is in effect.
- Both in the same month — the month's failure-to-file penalty is reduced by that month's failure-to-pay penalty, so the two rates are not simply added.
- More than 60 days late — a minimum failure-to-file penalty applies: the lesser of $525 (for returns required to be filed in 2026) or 100% of the tax owed. The dollar figure is indexed; check the current one.
- Interest is a third, separate charge on top of both.
If a refund is owed instead: both penalties are a percentage of tax owed, so with nothing owed there is nothing for them to attach to. The deadline that matters then is different — IRS Topic No. 153 (last reviewed 7 May 2026) says a refund must be claimed by filing within three years of the return due date, after which it is forfeited. The IRS also holds refunds where its records show other returns are past due.
Canada (CRA "Late-filing penalty", date modified 20 January 2026):
- 5% of the balance owing, plus 1% per full month late, to a maximum of 12 months.
- Repeat penalty: 10% plus 2% per full month, to a maximum of 20 months — but only where the person was charged a late-filing penalty for the 2022, 2023 or 2024 tax year and received a formal demand to file. One prior late year alone does not trigger it.
- Compound daily interest runs on any unpaid balance from the day after the due date.
- Self-employed Canadians file by June 15 but the balance owing is still due April 30, so filing on time and still owing interest is possible. Dates: canadian-tax-deadlines-2026.
What to do, in order: file even without payment; pay what you can against the balance; set up an instalment or payment arrangement for the rest; ask a tax professional about first-time or reasonable-cause relief before assuming the penalty is fixed.
Do not blend the IRS and CRA figures into one answer — they are different systems with different rates.
Full guide: https://www.expensebot.ai/blog/missed-tax-filing-deadline-what-happens · Dates by country: https://www.expensebot.ai/tax-filing-deadlines
Estimates — confirm with your tax professional.