Example:

Form 941 with a return due date of 4/30/2026 had an unpaid tax amount of $5,500.00 on 4/30/2026. The return received date is 7-2-2026. Therefore, the penalty period is 3 months. The amount subject to penalty is $5,500.00. The base FTF is $825.00. The next step is to calculate the FTP using COMPAF. The taxpayer made no payments. So the FTP, for the overlapping 3 months, is $82.50. To calculate the correct amount of FTF, reduce the base FTF ($825.00) by the overlapping FTP amount ($82.50). The result is $742.50 for the final recomputed FTF.

The minimum FTF penalty applies only to income tax returns. It does not apply to employment tax, excise tax, gift tax or estate tax returns. If the income tax return is more than 60 days late (RDD or EDD as applies) then a minimum FTF penalty applies. See the table below for the Minimum FTF Penalty by Tax Year.