WASHINGTON, D.C. — The Internal Revenue Service on Friday maintained its 7% annual interest rate on individual tax underpayments and overpayments for the fourth quarter of 2026, preserving borrowing costs for taxpayers with unpaid federal obligations while keeping large corporate underpayments subject to a 9% rate.
The rates apply from Oct. 1 through Dec. 31 and are compounded daily, meaning interest accumulates throughout the quarter on outstanding balances and qualifying overpayments.
Individuals will continue paying 7% on unpaid federal taxes and receiving 7% on overpayments. Corporations will pay 7% on ordinary underpayments but receive 6% on overpayments.
Corporate taxpayers receive a lower 4.5% rate on the portion of any overpayment exceeding $10,000 for a taxable period. Large corporate underpayments remain subject to the higher 9% annual rate.
Revenue Ruling 2026-15 also confirms that the 7% underpayment rate applies when calculating additions to tax for insufficient estimated tax payments during the fourth quarter.
Deposits made under Section 6603 of the Internal Revenue Code will earn 4% interest during the same period, according to the ruling.
The fourth-quarter rates reflect a federal short-term interest rate of 4%, calculated using the rate determined in July and rounded to the nearest full percentage point.
Federal law generally sets individual overpayment and underpayment rates at three percentage points above the short-term rate. Corporate overpayment rates are two percentage points above that benchmark, while large corporate underpayments carry a five-percentage-point premium.
The rate on corporate overpayments exceeding $10,000 is calculated at one-half percentage point above the federal short-term rate.
The IRS recalculates the rates quarterly. Historical tables included in the ruling show the standard underpayment rate fell to 6% during the second quarter of 2026 before returning to 7% in the third quarter, where it will remain through year-end.
Revenue Ruling 2026-15 is scheduled for publication in Internal Revenue Bulletin 2026-36, dated Aug. 31.
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