The IRS has announced that the interest rates on overpayments and underpayments of tax for the calendar quarter beginning October 1, 2014 will remain unchanged.*
The rates will be:
- 3 percent for overpayments, in cases other than corporations;
- 2 percent for overpayments in the case of a corporation (except 0.5 percent for the portion of a corporate overpayment exceeding $10,000); and
- 3 percent for underpayments (except 5 percent for large corporate underpayments).
The Tax Code provides that the rate of interest on over- and underpayments of tax is to be determined on a quarterly basis. The interest rates for the fourth quarter 2014 are computed by using the federal short-term rate based on daily compounding determined during July 2014.