The second-quarter estimated tax payment is due Monday, June 15, and if you skipped the April one, you’re probably planning to send double this time. That works, but it isn’t the best fix. If you also have a paycheck, raising your withholding for the rest of the year can wipe out the penalty for a missed estimated tax payment entirely, including the one from April, because of a quirk in how the IRS counts withholding.
The penalty itself is also smaller than most people fear. In fiscal year 2024, the IRS assessed 15.3 million estimated tax penalties on individual returns, totaling about $4.82 billion, according to its Data Book. That works out to roughly $315 per penalty. It’s annoying money, but it’s interest, not a fine, and it’s charged at a rate that was 6% for April through June. So don’t panic. Do the cheap thing.
The estimated tax penalty is just interest, and the clock is per quarter
The IRS doesn’t charge a flat fee for missing an installment. It figures how much you were short on each due date and charges interest on that shortfall until you pay it or until the return is due, whichever comes first. The rate is the federal short-term rate plus three percentage points, reset every quarter. For the second quarter of 2026 it dropped to 6% from 7%, under Revenue Ruling 2026-5.
Because it’s simple interest on each quarter’s gap, a $700 shortfall costs about 12 cents a day at 6%. Paying a partial amount today beats waiting until you can pay the whole thing in August.
You can avoid the penalty altogether by hitting one of the safe harbors in IRS Publication 505. You’re generally safe if your withholding and timely estimated payments cover at least 90% of this year’s tax, or 100% of last year’s tax. If your 2025 adjusted gross income was more than $150,000 ($75,000 if married filing separately), the prior-year number rises to 110%. You also generally won’t owe a penalty if your balance due after withholding and credits is under $1,000.
Why withholding beats a catch-up check
Here’s the part that changes your decision. Publication 505 says that, unless you choose otherwise, one-fourth of your total withholding for the year is treated as withheld on each of the four due dates. It doesn’t matter when it actually came out of your paycheck. A dollar withheld from your December check counts as if a quarter of it had been paid in April.
Estimated payments don’t get that treatment. A check you send on June 15 is credited on June 15, so the April shortfall still accrues interest for the two months it sat unpaid. Withholding is the only payment method the IRS spreads backward across the year.
So if you have a W-2 job alongside freelance or side income, raising your withholding through the rest of 2026 can cover the April installment retroactively. You file a new W-4 with your employer and put an extra flat amount per paycheck in Step 4(c).
A worked example of fixing a missed estimated tax payment
Say you had a W-2 job and a design side business last year, your total 2025 federal tax was $9,800, and your AGI was under $150,000. To use the prior-year safe harbor, you need $9,800 paid in during 2026, or $2,450 per quarter. Your employer will withhold about $7,000 this year, which the IRS credits at $1,750 per quarter. That leaves a $700 gap each quarter, and you didn’t send anything in April.
Here are three ways it can play out, using the 6% second-quarter rate. (The rate resets quarterly, so later-period interest could be a bit different.)
| Approach | Estimated penalty |
|---|---|
| Send $1,400 on June 15, then $700 in September and January | $7.02 |
| Pay nothing extra until you file in April 2027 | $111.73 (at a flat 6%) |
| Add $200 to each of your remaining 14 paychecks | $0 |
In the first case, only April’s $700 is late, by 61 days. At 6% a year, that’s $700 times 0.06 times 61 over 365, or $7.02. In the second case, each $700 shortfall accrues interest from its due date to April 15, 2027: $42.00 for the April installment, $34.98 for June, $24.39 for September, and $10.36 for January, which adds up to $111.73.
In the third case, you need $2,800 more in withholding to reach $9,800 for the year. Spread over 14 remaining biweekly paychecks, that’s $200 per check. Because the IRS treats the whole $9,800 of withholding as paid evenly, $2,450 lands on each due date, including the April one you missed. The penalty is zero, and you never have to remember a September or January deadline.
The dollar difference between the first and third options is small here, I’ll admit. The bigger payoff is behavioral. People who miss April often miss September too, and a withholding change runs on autopilot.
When a catch-up estimated payment still makes sense
The withholding fix only helps if you have wages, or a pension or IRA distribution you can have tax withheld from. Full-time freelancers with no paycheck have to use estimated payments, and for them, the fastest fix is to pay the missed amount now through IRS Direct Pay or the Electronic Federal Tax Payment System. Every week earlier is a little less interest.
Uneven income is the other exception. If most of your side income arrives late in the year, you may owe less in early quarters than an even split suggests. Form 2210’s annualized income method lets you match installments to when you actually earned the money, which can reduce or eliminate an early-quarter penalty. It’s more paperwork, and tax software handles most of it.
What I wouldn’t do is put a June catch-up payment on a credit card. The IRS’s card processors charge a fee, and a card balance at the Fed’s February 2026 average of 21.52% for accounts paying interest costs far more than a 6% IRS interest charge. If cash is tight this month, pay what you can and let the small penalty accrue rather than paying credit card interest to avoid it.
Set it up once and stop thinking about quarterly deadlines
If you started your first job this spring, the earlier post on the W-4 for a June start date covers how payroll withholding is calculated in the first place. And if your side income is growing, the guide to building multiple income streams is worth a reread with taxes in mind, since every new stream is income nobody is withholding for.
A missed estimated tax payment is cheap to fix and easy to prevent. If you have a paycheck, an extra amount in Step 4(c) of your W-4 handles the rest of 2026 and quietly covers April too. Your exact numbers depend on your income, your 2025 return, and how much you have withheld, so a tax professional can confirm the right amount for your situation.
Sources: IRS Publication 505, Tax Withholding and Estimated Tax; IRS Data Book, civil penalties assessed; HR Morning on second-quarter 2026 IRS interest rates
