The IRS says interest rates affecting corporations and other taxpayers who overpaid or underpaid their federal taxes will remain unchanged for the fourth quarter of 2021. Interest rates will be:
- 3% for overpayments (2% in the case of a corporation)
- 5 % for the portion of a corporate overpayment exceeding $10,000
- 3% percent for underpayments
- 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.
Revenue Ruling 2021-17, announcing the rates of interest, will appear in Internal Revenue Bulletin 2021-37, dated Sept.13, 2021.
