Tax Planning
Avoiding Estimated Tax Penalties for Farmers & Fishermen: Real Relief in 2025
The IRS is waiving estimated tax underpayment penalties for qualifying farmers and fishermen for 2025 — that changes prepayment strategies for individuals in these trades.
By NomadicTax Research Team • 5-8 min read • July 25, 2026
## What the New Waiver Notice Provides
Through **Notice 2026-24**, the IRS announced **automatic waiver** of the addition to tax under **section 6654** for many farmers and fishermen who underpaid estimated taxes in **2025**, as long as they file by April 15, 2026 and pay full tax due by that date. ([irs.gov](https://www.irs.gov/irb/2026-17_IRB?utm_source=openai))
This change is in response to software and processing delays affecting Form 8995 (Qualified Business Income Deduction Simplified Computation), which prevented some from completing returns early enough. ([irs.gov](https://www.irs.gov/irb/2026-17_IRB?utm_source=openai))
## Who Qualifies & Key Details
- Must be an individual **farmer or fisherman**, defined under the tax code.
- Applicable to **calendar year 2025** tax returns.
- Must file return and pay full tax due by **April 15, 2026**. Late fees still apply if the return’s late. ([irs.gov](https://www.irs.gov/irb/2026-17_IRB?utm_source=openai))
## Strategic Implications for Cash Flow Planning
- Farmers and fishermen with seasonal or fluctuating income often rely on estimates—this waiver means lower risk if prepayments were mis-timed in 2025.
- However, missing the April 15, 2026 deadline or failing to pay fully disqualifies the waiver.
## Example Scenarios
- A sole proprietor farmer realizes after harvest that estimated tax payments were too low in 2025 and is worried about added penalties. If they file their 2025 return by April 15 and pay all due, the penalty under § 6654 is waived.
- A fisherman with irregular income who delayed return due to software errors will similarly avoid addition to tax if caught up by deadline.
## Recommendations Moving Forward
- If you’re eligible, don’t delay filing or payments due; avoid hitting the April deadline unprepared.
- Ensure sufficient funds are available by April 15 to cover full tax liability.
- For future years, maintain adequate estimated tax payments to avoid exposure—especially if software or sudden expenses complicate estimation.
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For many farmers and fishermen, this is more than just relief — it’s a cushion to navigate regulatory or tech delays **without penalty**, if action is taken in time.