8/25/2021
Revenue Ruling 2021-17 provides interest rates for underpayments and overpayments of tax for the calendar quarter beginning October 1, 2021.
Section 6621 of the Internal Revenue Code establishes the interest rates on overpayments and underpayments of tax.
Under section 6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point.
Under section 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points.
Interest rates will remain the same for the calendar quarter beginning October 1, 2021.
3% for overpayments (2% in the case of a corporation) and underpayments
0.5 % for the portion of a corporate overpayment exceeding $10,000
3% percent for underpayments, the 3% rate also applies to estimated tax underpayments for the fourth calendar quarter beginning October 1, 2021
5% percent for large corporate underpayments
section 6603 deposits is 0 percent
The federal short-term rate determined in accordance with section 1274(d) during July 2021 is the rate published in Revenue Ruling 2021-14, 2021-31 IRB 164, to take effect beginning August 1, 2021.
The federal short-term rate, rounded to the nearest full percent, based on daily compounding determined during the month of July 2021 is 0 percent.
An overpayment rate of 3 percent (2 percent in the case of a corporation) and an underpayment rate of 3 percent are established for the calendar quarter beginning October 1, 2021.
The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning October 1, 2021 is 0.5 percent.
The underpayment rate for large corporate underpayments for the calendar quarter beginning October 1, 2021, is 5 percent.
These rates apply to amounts bearing interest during that calendar quarter.
Sections 6654(a)(1) and 6655(a)(1) provide that the underpayment rate established under section 6621 applies in determining the addition to tax under sections 6654 and 6655 for failure to pay estimated tax for any taxable year, so the 3 percent rate also applies to estimated tax underpayments for the fourth calendar quarter beginning October 1, 2021.
The rate of interest on section 6603 deposits is 0 percent for the fourth calendar quarter in 2021 pursuant to section 6603(d)(4)
Revenue Ruling 2021-17 is in IRB: 2021-37, dated September 13, 2021.