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IRS Keeps Interest Rates Unchanged for Q3 of 2017

Jun 12th 2017
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Interest rates on tax overpayments and underpayments will stay at their current levels for the third quarter of 2017, the IRS announced on June 9.

According to Revenue Ruling 2017-13, interest rates for the calendar quarter that begins on July 1 will be:

  • Four percent for overpayments (3 percent for corporations).
  • One and one-half percent for the portion of a corporate overpayment exceeding $10,000.
  • Four percent for underpayments.
  • Six percent for large corporate underpayments.

Interest rates on overpayments and underpayments of tax are determined on a quarterly basis, in accordance with Section 6621 of the Internal Revenue Code.

“The federal short-term rate determined in accordance with Section 1274(d) during April 2017 is the rate published in Revenue Ruling 2017-11, 2017-19 IRB 1230, to take effect beginning May 1, 2017,” the IRS states. “The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of April 2017 is 1 percent.”

So, 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, according to the IRS.

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 of a percentage point.

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