Penalty and Interest Rates
Interest
Interest on past due taxes accrues monthly from the date the tax is due until the date the tax is paid.
- Interest accruing for months prior to July 1, 2016 accrues at the rate of 12 percent annually (1 percent per month).
- Interest that accrues beginning July 1, 2016 accrues at an annual rate equal to the Federal Reserve prime rate plus 3 percent.
- The interest rate will be reviewed and may be adjusted in January of each subsequent calendar year.
Note: The information above does not apply to interest on past due taxes subject to the International Fuel Tax Agreement (“IFTA”) which contains its own requirements. [O.C.G.A. § 48-2-40]
Refunds
Unless otherwise provided by statute or regulation, interest on refunds accrues from the date of payment of the tax.
- Interest accruing for months prior to July 1, 2016 accrues at the rate of 12 percent annually (1 percent per month).
- Interest that accrues beginning July 1, 2016 accrues at an annual rate equal to the Federal Reserve prime rate plus 3 percent.
- The interest rate will be reviewed and may be adjusted in January of each subsequent calendar year.
Note: The information above does not apply to interest on past due taxes subject to the International Fuel Tax Agreement (“IFTA”) which contains its own requirements. [O.C.G.A. § 48-2-35]
Assessments
Interest on past due taxes accrues monthly from the date the tax is due until the date the tax is paid.
- Interest accruing for months prior to July 1, 2016 accrues at the rate of 12 percent annually (1 percent per month).
- Interest that accrues beginning July 1, 2016 accrues at an annual rate equal to the Federal Reserve prime rate plus 3 percent.
- The interest rate will be reviewed and may be adjusted in January of each subsequent calendar year.
Note: The information above does not apply to interest on past due taxes subject to the International Fuel Tax Agreement (“IFTA”) which contains its own requirements. [O.C.G.A. § 48-2-40]
Penalties
The Department may assess penalties for several reasons, such as late filing, late payment, or otherwise not complying with tax requirements. Multiple different penalties may be assessed simultaneously. Penalties vary by tax type, and the rate of the penalty is set by law. Below are explanations of the possible penalties for each tax type.
Income Tax
Corporate Net Worth Tax
Motor Fuel Distributor Tax
IFTA Motor Fuel Carrier Tax
Sales & Use Tax
Withholding Tax
Income Tax (Individual, Corporate, and Partnerships electing to pay at the entity level)
| Penalty | What Is It? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Late Filing | Failure to file return by the due date | 5% of the tax not paid by the original due date, and an additional 5% for each additional month the return is late | 25% of the tax due* | 48-7-57 |
| Late Payment | Failure to pay the tax due on the original return due date (regardless of whether the return is filed) | 0.5% of the unpaid tax due, and an additional 0.5% of the outstanding tax for each additional month | 25% of the tax due* | 48-7-86 |
| Frivolous Return | Filed return does not contain information to determine tax liability, with a frivolous position or the intent to delay or impede tax collection | $1,000 | $1,000 | 48-7-57.1 |
| Negligent Underpayment | Underpayment of tax due because of negligence or disregard of requirements | 5% of the underpayment of the tax due | - | 48-7-86 |
| Fraudulent Underpayment | Underpayment of tax due because of fraud | 50% of the underpayment of the tax due | - | 48-7-86 |
| Failure to Pay Estimated Tax (Individual) | Underpayment of estimated tax | 9% per year of the underpayment (use Form 500 UET to compute the penalty) | - | 48-7-120 |
| Failure to Pay Estimated Tax (Corporate) | Underpayment of estimated tax or failure to pay estimated tax | 9% per year of the underpayment (use Form 600 UET to compute the penalty) and 5% of Georgia income tax imposed for the taxable year | - | 48-7-120 and 48-7-126 |
*The combined total of the Late Filing Penalty and the Late Payment Penalty cannot exceed 25% of the tax due on the return due date. [O.C.G.A. § 48-7-86]
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Late Filing | Failure to file return by the due date | 10% of the tax due | - | 48-13-79 |
| Late Payment | Failure to pay the tax due on the due date for payment (regardless of whether the return is filed) | 10% of the tax due | - | 48-13-79 |
Mandatory Electronic Filing*
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| EFT filing for sales and use tax, withholding tax, or motor fuel distributor tax | Failure to file return electronically | Greater of $25 OR 5% of the tax due before application of any payments or credits | - | 48-2-44.1 |
| EFT Payment | Failure to remit payment of the tax due electronically | 10% of the tax due | - | 48-2-32(f) |
* Any taxpayer who owes more than $500 in sales and use tax, withholding tax, or motor fuel distributor tax on any return must remit all tax payments and file all associated returns electronically. [O.C.G.A. § 48-2-32(f) and Ga. Comp. R. & Reg. § 560-3-2-.26]
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Failure to File | Failure to file return by the due date | $50 for each failure | - | 48-9-16(a) |
| Failure to Pay | Failure to pay the tax due on the return due date (regardless of whether the return is filed) | 10% of the unpaid tax | - | 48-9-16(b) |
| False or Fraudulent Return | Filing returns that are false or otherwise fraudulent | 50% of tax due | $200 | 48-9-16(c) |
| Dyed Fuel | Knowingly selling, delivering, or consuming dyed fuel for highway use | Greater of $1000 OR 10% per gallon of dyed fuel (multiplied by the number of past violations) | - | 48-9-16(e) |
| Dyed Fuel Notice | Selling or delivering dyed fuel without giving notice required by law | Greater of $100 per month for each month violation occurs OR $1 per gallon of dyed fuel* | - | 48-9-16(f) |
*This penalty can be reduced to 10% of the amount ordinarily due with a showing of no highway use and reasonable cause.
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Failure to File* | Failure to file return by the due date | $25 for each failure | - | 48-9-45(b) |
| Failure to Pay | Failure to pay the tax due on the return due date (regardless of whether the return is filed) | Greater of $10 OR 10% of the unpaid tax due | - | 48-9-45(c) |
| Unlawful Operation | Operating motor vehicle in violation of the law | $25 per motor vehicle in violation | - | 48-9-45(a) |
*When a licensee fails, neglects, or refuses to file an IFTA quarterly tax report, the Department will create an assessment for the tax, penalty, and interest based on the best information available, including the licensee's filing history. In the absence of adequate records, a standard of 4 miles per gallon will be used to determine fuel consumption and miles or kilometers traveled in each jurisdiction. The burden of proof remains with the licensee to show that the basis of the assessment is incorrect.
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Failure to File | Failure to file return by the due date | Greater of 5% of the tax OR $5, and an additional 5% or $5 for each additional late month | Greater of 25% of the tax OR $25 | 48-8-66 |
| Failure to Pay | Failure to pay the tax due on the return due date (regardless of whether the return is filed) | Greater of 5% of the tax OR $5, and an additional 5% or $5 for each additional late month | Greater of 25% of the tax OR $25 | 48-8-66 |
| False or Fraudulent Return | Filing returns that are false or otherwise fraudulent | 50% of tax due | - | 48-8-66 |
| Penalty | What is it? | Rate | Maximum | Statute (O.C.G.A.) |
|---|---|---|---|---|
| Failure to File | Failure to file return by the due date | $25 plus 5% of the tax withheld before application of any payments or credits or adjustments, and an additional 5% for each subsequent late month | $25 plus 25% of the tax withheld before application of any payments or credits or adjustments** | 48-7-126 |
| Failure to Pay | Failure to pay the tax due on the return due date (regardless of whether the return is filed) | $25 plus 5% of the tax, and an additional 5% for each subsequent late month (Minimum $25) | $25 plus 25% of the tax withheld before application of any payments or credits or adjustments** | 48-7-126 |
| Failure to Withhold | Employer required to withhold fails to do so | $10 per employee, quarterly | $10 per employee, quarterly | 48-7-126 |
| Failure to provide W-2s or 1099s to payees by the required time | Employer required to provide fails to do so (effective for 2019 and later calendar year forms) | The penalty ranges from $10 to $50 per W-2 or 1099 depending upon how late it is provided | The maximum depends upon how late it is provided | 48-7-105 |
| Failure to file W-2s or 1099s with the Department by the required time | Employer required to file fails to do so (effective for 2019 and later calendar year forms) | The penalty ranges from $10 to $50 per W-2 or 1099 depending upon how late it is filed | The maximum depends upon how late it is filed | 48-7-106 |
| Fraudulent Withholding Receipt | Furnishing false or fraudulent withholding receipt to an employee | $50 for each receipt | - | 48-7-126 |
**For each quarter, if at any time the amount of the late filing penalty plus the late payment penalty charged would exceed $25 plus twenty-five (25) percent of the tax withheld before application of any payments or credits or adjustments, the amount necessary to reach this threshold will be assessed and no further late payment penalty or late filing penalty will be assessed.
Penalty Waivers
The Department may waive penalty in whole or in part if it determines that there is reasonable cause to do so. [O.C.G.A. § 48-2-43]. Reasonable cause may exist where the failure to comply with tax requirements was not a result of purposeful disregard of tax requirements. The Department will determine each penalty waiver request on its own merits, taking into account documentation provided and the taxpayer’s tax compliance history. The Department may also grant a partial penalty waiver.
To request a penalty waiver, go online to the Georgia Tax Center. Read more about requesting a penalty wavier.
*The combined total of the late filing penalty and the late payment penalty cannot exceed 25% of the tax due on the return due date. [O.C.G.A. § 48-7-86]