IRS interest rates hold steady for Q2

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The IRS has announced that interest rates will remain the same for the calendar quarter beginning April 1.

The rates will be:

  • 4 percent for overpayments [3 percent in the case of a corporation];
  • 1.5 percent for the portion of a corporate overpayment exceeding $10,000;
  • 4 percent for underpayments; and
  • 6 percent for large corporate underpayments.

Under the IRC, the interest rate is determined quarterly. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

In the case of a corporation, the underpayment rate is generally the federal short-term rate plus 3 percentage points, while the overpayment rate is generally 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 half a percentage point.

The above rates are computed from the federal short-term rate determined during January 2017 to take effect Feb. 1, 2017, based on daily compounding.

Revenue Ruling 2017-6 (https://www.irs.gov/pub/irs-drop/rr-17-06.pdf, announcing the rates of interest, will appear in Internal Revenue Bulletin 2017-12, dated March 20.

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