Tax Planning
Relief for Farmers & Fishermen: Waiver of Underpayment Penalties
Farmers and fishermen now have an automatic waiver from penalties for underpaying estimated taxes for the 2025 tax year—if specific conditions are met.
By NomadicTax Research Team • 5-8 min read • April 23, 2026
## The Waiver Explained
The IRS has issued **Notice 2026-24**, providing **automatic waiver** of the addition to tax under **section 6654** for qualifying farmers and fishermen who underpaid their estimated income taxes for **tax year 2025**. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai)) To qualify, the individual must file their **2025 return** (calendar year) by **April 15, 2026**, and pay the full amount of tax due by that date. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
## Who Qualifies
- Individuals who meet the definition of a **farmer or fisherman** under the Internal Revenue Code.
- Must be calendar-year filers.
- Must not have already paid sufficient estimated taxes in advance large enough to avoid underpayment penalties but be in a position to file & pay in full by the deadline.
## Practical Implications & Examples
- **Scenario A**: Joe is a commercial fisherman; he didn’t make all four quarterly estimates during 2025 and owes tax by April 15, 2026. If he files by then and pays his full tax liability with return, **no underpayment penalty** under 6654 will be imposed.
- **Scenario B**: Maria, a small farmer, missed some payments but will file & pay by deadline—also qualifies.
- **Scenario C**: Sarah misses the deadline or fails to pay all taxes owed—penalties still apply as usual.
## Action Steps for Eligible Taxpayers
1. **Review your 2025 estimated tax payments** to see if you underpaid.
2. **Confirm qualifying status** as farmer or fisherman (look up definitions in IRC §6654).
3. **File your return by April 15, 2026**, and ensure full tax payment is made on or before that date.
4. If you already filed and reported a penalty, **file Form 843** to request abatement based on this notice. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
## Why It’s Important
This waiver acknowledges that many taxpayers in farming or fishing face cyclic incomes, weather interruptions, or delayed revenue—making estimated tax payments challenging. It gives much-needed relief and reduces surprises during filing season.
## Avoid Missteps
- Don’t assume automatic filing extensions push your deadline—only **April 15** qualifies for this waiver.
- If you can’t pay full tax by deadline, interest continues to accrue.
- If you’ve already paid penalty, check if abatement is available, but the window to file Form 843 is limited.
This relief opportunity can substantially reduce financial strain for individuals in agriculture and seafood industries—making tax planning smoother just as the tax filing deadline arrives.