Interest rates for tax underpayments and overpayments will stay the same for the fourth calendar quarter of 2026, which begins on Oct. 1, the IRS said on Friday.
For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.
Here is the complete list of the 2026 fourth 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.
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 Aug. 21 are computed from the federal short-term rate determined during July 2026. See Revenue Ruling 2026-15 for more information.
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Tags: Income Taxes, interest rates, IRS, overpayments, Taxes, underpayments
