Interest Rates Not Changing for Final Quarter of 2006
The rates for the fourth quarter are:
- 8 percent for overpayments [7 percent in the case of a corporation];
- 8 percent for underpayments;
- 10 percent for large corporate underpayments; and
- 5.5 percent for the portion of a corporate overpayment exceeding $10,000
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.