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NJ Income Tax – Penalties, Interest, and Collection Fees

When a tax return is filed after the due date or the tax due is paid late, penalty and interest charges may be assessed. The late filing penalty is 5% of the tax due for each month or portion of a month the return is late. The maximum penalty for late filing is 25%. The Division may also charge a penalty of $100 for each month the return is late.

A late payment penalty of 5% of the tax due may also be charged.

Interest is calculated at the annual rate of 3% above the prime rate for every month or portion of a month the tax is unpaid, compounded annually. At the end of each calendar year any tax, penalties, and interest still due (unpaid) become part of the balance on which interest is charged.

Effective July 1, 2016, the Referral Cost Recovery Fee rate is 10.7%

In addition, if your tax bill is sent to our collection agency, a referral cost recovery fee of 10.7% of the tax due will be added to the liability. If a certificate of debt is issued for the outstanding liability, a fee for the cost of collection of tax may also be imposed.

Technical Bulletin TB-21(R) shows the current interest rate and the interest rate history for recent years.

Last Updated: Tuesday, 02/07/17

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