Extended 1120-S and 1065 returns are due September 15, 2026 — and the late-filing penalty is $255 per owner, per month, even at $0 tax. What it costs, how abatement works, and the same-day Q3 estimate everyone forgets.
If your S corporation or partnership filed an extension back in March, that extension runs out on Monday, September 15, 2026. This is the final federal deadline for calendar-year 2025 returns on Form 1120-S (S corporations) and Form 1065 (partnerships and multi-member LLCs taxed as partnerships). There are no second extensions — after September 15, every month costs you real money.
If you never filed the extension in March and haven’t filed the return, the penalties below have already been accruing since March — file now, because they keep growing every month.
The late-filing penalty for these returns has nothing to do with how much tax you owe. S corporations and partnerships mostly pass income through to their owners, so many owners assume a $0-tax return can’t generate a penalty. It can, and it does:
$255 per owner, per month (or any part of a month), for up to 12 months.
Here is what that looks like in practice for returns filed late in the 2026 filing season:
| Owners | 1 month late | 3 months late | 12 months late (max) |
|---|---|---|---|
| 2 (e.g., spouses in an LLC) | $510 | $1,530 | $6,120 |
| 3 shareholders | $765 | $2,295 | $9,180 |
| 5 partners | $1,275 | $3,825 | $15,300 |
| 10 partners | $2,550 | $7,650 | $30,600 |
Two details that catch people every year: filing one day late counts as a full month, and the IRS assesses this automatically — the CP162A notice simply shows up in your mailbox with the math already done. Late or incomplete K-1s can trigger separate per-K-1 penalties on top.
September 15 is also the due date for third-quarter 2026 estimated payments. If your business is having a better year than 2025, this is the payment where people fall behind. The safe-harbor rules protect you from underpayment penalties if, through withholding and estimates, you pay the lesser of:
With the IRS underpayment interest rate at 7%, compounded daily, for the third and fourth quarters of 2026, underpaying estimates is an expensive loan you didn’t mean to take.
If your return is still sitting on a pile of unreconciled books, that is a solvable problem this week — it stops being cheap to solve on Tuesday.
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