The Internal Revenue Service said interest rates will remain the same for the calendar quarter beginning April 1, 2020.

According to an IRS news release the rates will be:

  • Five (5) percent for overpayments [four (4) percent in the case of a corporation];
  • Two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000;
  • Five (5) percent for underpayments; and
  • Seven (7) percent 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 3 percentage points, the news release stated.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is 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 one-half (0.5) of a percentage point, the release stated.

The interest rates announced in late February are computed from the federal short-term rate determined during January 2020 and took effect Feb. 1, 2020, based on daily compounding.

Source: IRS