The third quarterly estimated tax payment for 2026 is due September 15, 2026. Miss it and the IRS assesses an underpayment penalty under IRC Section 6654, even if you pay the full balance in April when you file.
Who Must Pay Quarterly Estimated Taxes?
You must make quarterly payments if both conditions apply: you expect to owe at least $1,000 for 2026, and your withholding and refundable credits will not cover at least 90% of your 2026 tax or 100% (110%) of your 2025 tax.
Common situations:
- Self-employed individuals and freelancers with no employer withholding
- S-corporation shareholders receiving distributions with minimal withholding
- Investors with taxable capital gains, interest income, or rental income
- Gig workers and independent contractors paid via 1099
- Employees whose raise, bonus, or side income outpaced their withholding
How to Calculate the Prior-Year Safe Harbor
The simplest approach is the prior-year safe harbor: pay 100% of your 2025 total tax (110% if your 2025 AGI exceeded $150,000), divided into four equal installments. Hit that target and you avoid underpayment penalties regardless of what you actually owe for 2026.
Prior-Year Safe Harbor Calculation
CalculationStep 1: Find your 2025 total tax on Form 1040, line 24.
Step 2: Apply your safe harbor rate:
- 100% if your 2025 AGI was $150,000 or less
- 110% if your 2025 AGI exceeded $150,000
Step 3: Divide by 4. That is each equal quarterly installment.
By September 15: Three of those four payments must be complete (Q1 + Q2 + Q3).
Example: 2025 tax of $40,000, AGI over $150,000. Annual safe harbor = $44,000. Each installment = $11,000. Cumulative by September 15 = $33,000.
The Alternative: 90% of Current-Year Tax
If your 2026 income is materially lower than 2025, the current-year method may reduce your payments: pay 90% of your actual 2026 tax liability, projecting from year-to-date income. This requires more calculation but can lower what you owe in Q3.
This is where OBBBA matters most.
How OBBBA Affects Your Q3 Calculation
Several OBBBA provisions can reduce your 2026 taxable income compared to 2025:
- Tip income deduction (IRC Section 224): Eligible tipped workers can deduct up to $25,000 of qualifying tip income (phases out above $150,000 MAGI for single filers). If this applies, your current-year tax may be significantly lower than the prior-year safe harbor would suggest.
- Overtime deduction: Qualifying FLSA-required overtime pay is deductible above-the-line in 2026 (up to $12,500 single / $25,000 MFJ). Workers with significant overtime should recalculate their projected 2026 tax.
- 100% bonus depreciation: Business owners who placed qualified property in service in 2026 can deduct the full cost immediately, potentially eliminating substantial pass-through or self-employment income.
- SALT cap increase: The household SALT deduction cap rose to $40,000 for 2026 for itemizers in high-tax states, which lowers effective taxable income for some filers compared to 2025.
If any of these apply to you, compare both safe harbor methods. For a complete overview of quarterly deadlines and payment options, see our guide on 2026 estimated tax payments.
How to Pay
Use IRS Direct Pay at irs.gov or EFTPS (Electronic Federal Tax Payment System) for real-time, date-stamped payments. You can also mail a check with Form 1040-ES. Electronic payments provide a confirmed timestamp, which protects you if the IRS questions whether your payment arrived on time.
The Q4 2026 installment is due January 15, 2027.
Penalties for Missing the Deadline
The underpayment penalty under IRC Section 6654 accrues at the federal short-term rate plus 3 percentage points, compounded daily from September 15. For Q3 2026, that is approximately 7-8% annualized. The penalty applies per quarter, so a missed Q3 payment continues accruing even if you overpay in Q4.
Have questions about your estimated tax strategy? Contact TS CPA for a free consultation. We respond within the same day.