The overpayment rate is the federal short-term rate plus two percentage points
Interest rates will remain unchanged for the calendar quarter starting April 1, according to the IRS. For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.
Here is a complete list of the new rates:
- 7% for overpayments (payments made more than the amount owed), 6% for corporations.
- 4.5% for the portion of a corporate overpayment exceeding $10,000.
- 7% for underpayments (taxes owed but not fully paid).
- 9% for large corporate underpayments.
- Under the Internal Revenue Code, the rate of interest is determined quarterly.
- For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.
“Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point,” according to a release from the IRS.
Interest rates are computed from the federal short-term rate determined during Jan. 2025.
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