WASHINGTON —The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning January 1, 2020. The rates will be:
- 5% for overpayments (4% in the case of a corporation);
- 2.5% for the portion of a corporate overpayment exceeding $10,000;
- 5% for underpayments; and
- 7% 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 October 2019, to take effect November 1, 2019, based on daily compounding.
Revenue Ruling 2019-28 (PDF), announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2019-52, dated December 23, 2019.