New Tax Interest Rates Starting in April

Starting April 1st, there will be changes to the interest rates for overpayments and underpayments by individuals and corporations. Individuals will face an 8% annual rate, compounded daily, while corporations will have a slightly lower rate of 7%, also compounded daily, as stated by the IRS. These rates have remained unchanged since the fourth quarter of 2023 when they were adjusted from 7% to 8% for individuals and from 6% to 7% for corporations.

The newly established rates for the second quarter include:

8% for overpayments by individuals;

7% for corporations;

5.5% for corporate overpayments exceeding $10,000;

8% for underpayments;

And a higher rate of 10% for substantial corporate underpayments. These interest rates, recalibrated every quarter, are determined based on the federal short-term rate.

If you would like to read more on this topic, click here for CPA Practice Advisor’s article.