November 23, 2021
The Internal Revenue Service announced that interest rates will remain the same for the calendar quarter beginning January 1, 2022. The rates will be:
3% for overpayments
2% for corporate overpayments
0.5% for the portion of a corporate overpayment exceeding $10,000
3% for underpayments
5% for large corporate underpayments
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. The overpayment and underpayment rate is the federal short-term rate plus 3 percentage points for those other than corporations.
For corporations, 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 is the federal short-term rate plus one-half of a percentage point.
The interest rates announced today are calculated from the federal short-term rate determined in October 2021 effective November 1, 2021 based on daily compounding.
Revenue Ruling 2021-24 announcing the rates of interest is in Internal Revenue Bulletin 2021-50.