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Taxpayers may be assessed the following penalties. It’s important for you to understand these penalties and when they may be imposed .
Type of Penalty
Description of Penalty
Penalty Amount
If a taxpayer files their state income tax return more than six months after the due date, late filing penalty will be assessed on any unpaid balance. There is no penalty for filing late for a refund, except in the case of an Extended Delinquency penalty.
5% of tax not paid by the regular due date
Note: Filing extensions only extend the filing due date, not the payment due date.
Any income tax paid after the due date is subject to a late payment penalty on the unpaid balance as of the due date. For any payment made more than 180 days after the due date, there is an additional penalty.
· 4% of tax not paid by the regular due date, and
· 5% of tax not paid within 180 days after filing your client’s return
Extended Delinquency for Missing Returns
Assessed when the taxpayer has been notified in writing by the department that they have not yet filed a return for a particular year, and the taxpayer fails to file within the time allowed on the demand to file letter (normally 30 days).
5% of the unpaid tax or $100 (whichever is more)
Late Payment for Tax Assessments
Assessed when the taxpayer has received a Tax Order letter and they fail to make payment within 60 days of the assessment date or after resolution of an appeal.
· 5% of tax not paid within 60 days of the assessment date (or after resolution of an appeal), and
· 5% of tax not paid within 180 days of the assessment date
Intentionally file a false or
fraudulent return to claim a refundable credit
The Department may impose a penalty on taxpayers who fraudulently claim a refundable credit.
50% of the fraudulently claimed refund plus 50% of any understated tax
Interest Rate
We charge interest on tax and penalty from the time the debt is past due until it is paid in full. Interest rates change annually. The interest rate for 2018 is 4%.
Worksheet to Determine Penalty and Interest
Taxpayers filing and/or paying after the due date can calculate the late payment penalty, late filing penalty, and interest they will owe by completing the “Worksheet to Determine Penalty and Interest” on page 19 of the 2017 Minnesota Individual Income Tax Forms & Instructions booklet. If this worksheet has not been completed, we will complete this worksheet for your client and add the amount of interest and penalty to the amount owed.
For more information, visit the Penalties and Interest page of our website.
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