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Late Form 1065 / 1120-S penalty Filed your partnership return late? See the penalty.

The IRS charges a penalty for every owner, for every month or part of a month a partnership or S corporation return is late, even when no tax is owed. Calculate it in seconds. Free, no sign-up.

General information, not tax or legal advice. Updated October 22, 2026.

How the penalty works

Return originally due inPer owner, per month
2025 (2024 tax year)$245
2026 (2025 tax year)$255
2027 (2026 tax year)$260
  • Formula: amount × owners during the year × months late (up to 12).
  • Any part of a month counts as a full month. One day late is one month.
  • Deadlines: March 15 for calendar-year businesses, or September 15 with an extension (the next business day if a weekend).

Example

A 5-partner LLC files its 2025 Form 1065 on June 10, 2026 without an extension: due March 16, so 3 months late. Penalty: $255 × 5 × 3 = $3,825.

Relief

The IRS can remove the penalty for reasonable cause, or under first-time abatement if the business filed on time in the previous three years. For returns due from January 1, 2027, first-time abatement is replaced by the IRS’s Automatic Exemption from Penalty, applied when the return is processed. Small partnerships may also qualify under Rev. Proc. 84-35. None of these covers a return filed on time but incomplete.

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Sources: IRC sections 6698 and 6699; Rev. Proc. 2025-32 (2026 inflation adjustments); IRM 20.1.1.3.3.2.1 (First Time Abate) and IRM 20.1.1.3.3.2.5 (Automatic Exemption from Penalty, IRS procedural update of June 17, 2026). Calendar-year entities only.