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IRS Interest Rates Steady for Second Quarter

IRS Interest Rates Steady for Second Quarter

The Internal Revenue Service says its interest rates will hold at previous levels for the second quarter of 2021.

The IRS says the interest rates will be:

  • 3% for overpayments (2% in the case of a corporation);
  • 0.5% for the portion of a corporate overpayment exceeding $10,000;
  • 3% for underpayments; and
  • 5% for large corporate underpayments.

The Internal Revenue Code declares that the rate of interest is determined on a quarterly basis. For taxpayers who aren’t 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. The corporate overpayment rate is the federal short-term rate plus 2 percentage points.

However, when the underpayment is large, the rate increases to the federal short-term rate plus 5 percentage points.

The rate on the portion of a corporate overpayment of tax that exceeds $10,000 for a taxable period is the federal short-term rate plus half of a percentage point.

The new interest rates are calculated from the federal short-term rate that was determined during January 2021 and took effect Feb. 1.

The rates of interest are contained in Revenue Ruling 2021-6, and will appear in Internal Revenue Bulletin 2021-12, Dated March 22, 2021.

Source: IR-2021-50

Bob Williams

Forget genes; I’ve got words in my DNA. Communication has been part of who I am nearly all my life. From a long career in radio news to another one in newspapers – and a University of Georgia journalism degree sandwiched between the two – language has been my life. I’ve also been fortunate to have learned the tax business from the ground up here at Drake, starting with 1040.com online forms some years ago before moving on to work on the Web. In all things tax-ish, we aim to give you tools you can use.

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