The IRS said on Friday that it will not raise interest rates for the first calendar quarter of 2024.
Beginning on Jan. 1, the rate for overpayments and underpayments for individuals will be 8% per year, compounded daily. Here is a complete list of the Q1 2024 rates:
- 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
- 5.5% for the portion of a corporate overpayment exceeding $10,000.
- 8% for underpayments (taxes owed but not fully paid).
- 10% 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 on Nov. 17 are computed from the federal short-term rate determined last month. Revenue Ruling 2023-22 announcing the interest rates will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.