Do I Still Owe Interest If I File by the June 15 Expat Extension Deadline?
Yes. The automatic June 15 extension for U.S. expats abroad extends only the filing deadline, not the payment deadline. Interest on any unpaid tax balance begins accruing on April 15, regardless of your extension status. This is true for all expat extensions, including the October 15 and December 15 extensions (IRS: Interest on Underpayments and Overpayments).
How interest and penalties interact with extensions:
| Deadline | Filing Penalty? | Payment Interest? | Payment Penalty? |
| File by June 15 (auto extension) | No | Yes, from April 15 | Yes, 0.5%/month from April 15 |
| File by October 15 (Form 4868) | No | Yes, from April 15 | Reduced to 0.25%/month if 4868 filed |
| File by December 15 (discretionary) | No | Yes, from April 15 | Yes |
| File after your extension expires | Yes, 5%/month up to 25% | Yes, from April 15 | Yes |
Key distinction for expats:
- Filing extensions pushes back the due date when you must submit your return. No failure-to-file penalty during the extension period.
- Payment obligations are not extended. The IRS considers April 15 the payment due date for all taxpayers, including expats abroad.
- Interest rate: the federal short-term rate plus 3%, compounded daily. As of 2025, this is approximately 7-8% annually.
How to minimize interest:
- Pay estimated tax by April 15, even if you cannot file yet. Use IRS Direct Pay or EFTPS.
- Overpay slightly to avoid underpayment penalties entirely
- File as early as possible to stop interest from growing
- The June 15 extension waives only the failure-to-file penalty, not the failure-to-pay penalty or interest
If you expect a refund, the interest issue does not apply because there is no unpaid balance. The IRS pays interest on refunds issued more than 45 days after the filing deadline.
For more, see our Tax Deadlines for Expats guide.
Last updated on April 29, 2026
