Interest and penalties

Interest

We will charge interest on tax (including sales and use tax) that is not paid on or before the due date of your return, even if you received an extension of time to file your return.

Interest is a charge for the use of money and in most cases may not be waived.
Interest is compounded daily and the rate is adjusted quarterly.

Penalty for late filing

If you file late, we will charge a penalty unless you have a valid extension of time to file.

The penalty charge is:

5% of the tax due for each month (or part of a month) the return is late, up to a maximum of 25%
If your return is more than 60 days late, your minimum penalty is the lesser of $100 or the total amount due on the return

Penalty for late payment

If you do not pay your tax when due, we will charge you a penalty in addition to interest. The penalty may be waived if you can show reasonable cause for paying late.

The penalty charge is:

0.5% of the unpaid amount for each month (or part of a month) it is not paid, up to a maximum of 25%

Penalty for incorrect calculation of tax

If the tax you report on your return is less than the correct tax by more than 10% or $2,000, whichever is greater, you may have to pay a penalty.

The penalty charge is:

10% of the difference between the tax you reported and the tax you actually owe

Penalty for negligence, fraudulent returns, and frivolous returns

Negligence penalty

If you underreport tax on your return due to negligence but not with intent to defraud, we will charge:

a penalty of 5% of the difference between the correct tax and the tax shown on your return
50% of the interest due on any underpayment resulting from negligence

Fraudulent returns

If any part of a deficiency is due to fraud, we will charge:

a penalty of two times the difference between the correct tax and the tax shown on your return

Frivolous returns

If you file a frivolous income tax return we will charge a penalty of up to $5,000 in addition to any other penalty. Frivolous returns include returns that:

do not contain information needed to judge the correctness of the income tax return
report obviously and substantially incorrect information
intend to delay or impede the administration of Article 22 of the Tax Law or the processing of the return

Penalty for underpaying your estimated tax

We may charge you a penalty on the amount of estimated tax that you did not pay or paid late during the year (either through estimated tax payments, withholding tax, or a combination of the two). The penalty you will have to pay will equal the federal short-term interest rate plus five and one half percentage points (adjusted quarterly), but not less than 7.5%.

The underpayment penalty applies if your 2023 withholding and estimated tax payments are not at least the smaller of:

90% of the tax shown on your 2023 return,
100% of the tax shown on your 2022 return (110% of that amount if you are not a farmer or a fisherman and the New York adjusted gross income [NYAGI] (or net earnings from self-employment allocated to the MCTD) shown on that return is more than $150,000 [$75,000 if married filing separately for 2023]). You must have filed a return for 2022 and it must have been for a full 12-month year.

Note: Special rules apply to farmers and fishermen. See Form IT-2105.9-I, Instructions for Form IT-2105.9, Underpayment of Estimated Tax by Individuals and Fiduciaries.

If you determine that you underpaid or paid your estimated tax late, you must calculate the amount of your penalty using Form IT-2105.9, Underpayment of Estimated Tax by Individuals and Fiduciaries. Submit Form IT-2105.9 with your return.

Updated: November 21, 2023