How much is the penalty for a late Form 1065?

$255 per partner per month or part of a month for returns originally due in 2026, up to 12 months. It is $260 for returns due in 2027.

Is there a penalty if the partnership owes no tax?

Yes. The penalty is per owner per month, whether or not any tax is due.

Can the penalty be removed?

Often, if there is reasonable cause or the business has a clean three-year filing record (first-time abatement, replaced from 2027 by the IRS's automatic penalty exemption).

Does an extension help?

Yes. A timely Form 7004 moves the deadline to September 15; the penalty only applies after the extended date.

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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 in	Per 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.