- Late filing: for each whole or part month that a return is late, there is a penalty of 5% of the unpaid tax due with that return. The maximum penalty is 25%.
- Late payments: for each whole or part month the tax is late, a penalty of .5% of the amount of the tax generally applies. The maximum penalty is 25%.
Each state has different penalty schedules for late filing of income tax withholding and unemployment taxes. For example, Illinois imposes a minimum penalty of $50, plus 2% interest per month. The state of Connecticut charges either a $50 penalty or 10% of the unpaid taxes, whichever is higher. Clearly, filing nanny taxes late is very expensive.
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