The interest rates that the Internal Revenue Service uses will rise for the quarter beginning Oct. 1, the agency said.
For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.
Other new rates include:
- 8% for overpayments (exceeding the amount owed);
- 7% for corporations, or 5.5% for the portion of a corporate overpayment exceeding $10,000;
- 8% for underpayments; and,
- 10% for large corporate underpayments.
The rate of interest is determined quarterly. For taxpayers other than corporations, the overpayment and underpayment rates are 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) a percentage point.
Revenue Ruling 2023-17, announcing the rates of interest, will appear in Internal Revenue Bulletin 2023-37, dated Sept. 11, 2023.
