Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis
Washington – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1 2023,. 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 in excess of 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 on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points, and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 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.
The interest rates announced today are computed from the federal short-term rate determined during April 2023. See the revenue ruling for details. Revenue Ruling 2023-11 announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2023-23, dated June 5.
