IRS Says No Change in Tax Interest Rates for the First Quarter of 2024
Finberg Firm
The Internal Revenue Service (IRS) has recently announced that interest rates will remain the same for the quarter starting January 1, 2024.
For individual taxpayers, both overpayment and underpayment rates are set at 8% annually, calculated on a daily compounding basis. The following are the updated rates:
- Overpayments (amounts paid beyond what is due) will incur an 8% rate, but for corporations, this rate is 7%.
- Corporate overpayments exceeding $10,000 will be subject to a 5.5% rate.
- Underpayments (unpaid or partially paid taxes) will attract an 8% rate.
- Large corporate underpayments will be charged at a 10% rate.
- According to the Internal Revenue Code, these interest rates are adjusted quarterly. For non-corporate taxpayers, the rates for overpayments and underpayments are calculated as the federal short-term rate plus a 3% margin.
In the case of corporations, the underpayment rate is the federal short-term rate plus 3%, while the overpayment rate is the federal short-term rate plus 2%. Large corporate underpayments are subject to a rate of the federal short-term rate plus 5%. For corporate overpayments exceeding $10,000, the rate is the federal short-term rate plus an additional 0.5%.
These interest rates are based on the federal short-term rate as determined in October 2023. Further details can be found in the corresponding revenue ruling.