Massachusetts Interest and Penalty

What Are Interest and Penalties?

Interest. If you fail to pay the tax when due, interest will be charged. For an explanation of how interest is compounded in Massachusetts, see TIR 92-6, available at mass.gov/dor.

Penalty for late payment. The penalty for late payment is 1% per month (or fraction thereof) of the tax due, up to a maximum of 25%. Penalty for failure to file.

The penalty for failure to file a tax return by the due date is 1% per month (or fraction thereof) of the tax due, up to a maximum of 25%. If you were required to file a tax return for income received in any prior year and you did not file, you must file for that prior year.

Penalty for protested (“bad”) payment. If your payment is not honored by your bank because of insufficient funds or any other reason, a penalty may be added of $30 or the amount of the payment, whichever is less.

Addition for underpayment of estimated tax. You will generally be subject to this addition to tax if you did not have withholding and/or estimated payments equal to 80% of the total tax liability required to be paid and your 2021 tax due after credits and withholding is greater than $400. The 80% requirement is reduced to 66.67% for individuals who receive two-thirds of their income from fishing or farming. If you failed to meet these requirements, you must complete and enclose Massachusetts Form M-2210 to calculate the amount you must add to line 53. You do not have to complete Form M-2210 if the balance due with your return is $400 or less.

You may not be subject to an underpayment penalty if you qualify for one of the following exceptions:

◗ You are a qualified farmer or fisherman and are paying the full amount of the tax due on or before March 1, 2022;

◗ You were a Massachusetts resident and were not liable for 2020 taxes (where the taxable year was 12 months); or

◗ The sum of your estimated payments and withholding equals or exceeds your 2020 tax (where the taxable year was 12 months and a return was filed).