The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning Oct. 1, 2021. The rates will be:
- 3% for overpayments [2% in the case of a corporation];
- 0.5 % for the portion of a corporate overpayment exceeding $10,000;
- 3% percent for underpayments; and
- 5% percent 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 July 2021 to take effect Aug. 1, 2021, based on daily compounding.
Revenue Ruling 2021-17, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2021-37, dated Sept. 13, 2021.
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