State Tax Amnesty Programs 2025-2026

A state tax amnesty program is a limited-time opportunity offered by state tax agencies for taxpayers to pay overdue taxes with reduced or waived penalties and interest. These programs typically last 30-90 days and are designed to encourage voluntary compliance and collect unpaid taxes.

As of December 2025, New Hampshire has an active amnesty program running from December 1, 2025 through February 15, 2026, offering 100% penalty waiver and 50% interest reduction. Illinois recently closed its 2025 amnesty, and Indiana has an upcoming program expected in late 2026. Tennessee and Alabama have ongoing programs for Streamlined Sales Tax participants.

If you miss an amnesty deadline, you'll be responsible for the full amount of penalties and interest. There's typically no extension granted. However, you may still qualify for a Voluntary Disclosure Agreement (VDA) in many states, which offers penalty waivers with a limited look-back period (usually 3-4 years).

A VDA is an alternative to amnesty for businesses that have nexus in a state but haven't registered or filed required returns. VDAs typically offer penalty waivers and limit the look-back period to 3-4 years instead of the full statute of limitations. Unlike amnesty, VDAs are available year-round in most states.

Yes, if you owe taxes in multiple states with active amnesty programs, you can participate in each one separately. For businesses with nexus in many states, the Multistate Tax Commission (MTC) offers a Voluntary Disclosure Program that covers multiple states with a single application.

Coverage varies by state and program, but commonly covered taxes include: income tax (personal and corporate), sales and use tax, withholding tax, franchise tax, and business taxes. Some programs exclude certain tax types like trust fund taxes or taxes under current audit. Always check the specific program requirements.

Most amnesty programs specifically protect participants from criminal prosecution and provide limited audit protection for the amnesty periods. However, participation may put you on the state's radar for future compliance monitoring. Some states require multi-year compliance as a condition of amnesty benefits.

Amnesty programs are infrequent - most states offer them only once every 7-10 years. For example, Massachusetts offered its first amnesty in 10 years in 2024. This makes it critical to take advantage of amnesty when available, as the next opportunity may be years away.