WASHINGTON, D.C. — The Internal Revenue Service (IRS) has confirmed that interest rates for the calendar quarter beginning April 1, 2025, will remain unchanged. This decision marks consistency in rates that affect overpayments and underpayments for both individual taxpayers and corporations.
For individual taxpayers, the interest rate for both overpayments (excess payments) and underpayments (unpaid taxes) will stay at 7% annually, compounded daily. For corporations, the rates diverge slightly:
- Overpayments will incur a 6% rate.
- Overpayments exceeding $10,000 will accrue interest at 4.5%.
- Underpayments will accrue interest at 7%.
- Large corporate underpayments will remain at a higher rate of 9%.
These rates are determined quarterly under the Internal Revenue Code, leveraging the federal short-term rate plus a set percentage. Individual taxpayers face a 3-percentage-point addition to the federal short-term rate for both overpayments and underpayments. For corporations, overpayments are calculated with a 2-point addition, while large corporate underpayments involve a 5-point increase. Additional adjustments apply for corporate overpayments exceeding $10,000, which reflect only a 0.5-point addition to the federal short-term rate.
These rates, effective April 1, 2025, are based on the federal short-term rate assessed in January 2025. Revenue Ruling 2025-7, which formalizes the interest rate information, will be published in Internal Revenue Bulletin 2025-13 on March 24, 2025.
The IRS’s announcement reflects stability in taxpayer obligations. For individuals and corporations alike, these rates serve as a guide to managing tax payments and avoiding unnecessary financial penalties.
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