The IRS said Thursday that interest rates will remain the same for the calendar quarter beginning April 1, 2025.
For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily. Here is a full list of the second quarter interest rates:
- 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
- 4.5% for the portion of a corporate overpayment exceeding $10,000.
- 7% for underpayments (taxes owed but not fully paid).
- 9% for large corporate underpayments.
The IRS last November cut interest rates to their current levels for Q1 of 2025, the first time since 2020 that interest rates for tax overpayments and underpayments were lower than the previous quarter.
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 three percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five 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 January 2025. See Revenue Ruling 2025-7 for more details.
Related article:
IRS Cuts Tax Interest Rates For Q1 of 2025
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Tags: Income Taxes, interest rates, IRS, Taxes
