Penalty & Interest Rates

Penalty & Interest Rates

Applicable to Tax Years Beginning on or after January 1, 2016

Penalty

A penalty may be imposed on unpaid income tax, including unpaid estimated income tax, equal to 15% of the amount not timely paid. The penalty for unpaid employer withholding tax is 10% for the first month or fraction thereof, plus an additional 3% for each month late thereafter, not to exceed 50%.

Late Filing Penalty

A late filing penalty may be imposed at the rate of $25 per month (or fraction of a month) that a return remains unfiled.  This late filing penalty applies regardless of the liability on the return.  The late filing penalty shall not exceed $150 for each failure to timely file.

 Interest

Interest shall be imposed on all unpaid income tax, unpaid estimated income tax, and unpaid employer withholding tax.  The interest rate to be applied to each calendar year is the federal short-term rate, rounded to the nearest whole number percent, plus 5%.  The rates are as follows:

Calendar Year                                                                   Interest Rate

2016

5% per year or 0.42% per month

2017

6% per year or 0.50% per month

2018

6% per year or 0.50% per month

2019

7% per year or 0.58% per month

2020

7% per year or 0.58% per month

2021

5% per year or 0.42% per month

2022

5% per year or 0.42% per month

 

State of Ohio Laws governing interest and penalties can be found in the Ohio Revised Code, Section 718.27.