The Internal Revenue Service has announced that interest rates will remain the same for the calendar quarter beginning January 1, 2015. The interest rates are as follows: three percent for overpayments (two percent in the case of a corporation); three percent for underpayments; five percent for large corporate underpayments; and one-half percent for the portion of a corporate overpayment exceeding $10,000.
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 three percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five 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 a percentage point.
These interest rates are computed from the federal short-term rate based on daily compounding determined during October 2014 (IR-2014-111, December 4, 2014; Rev. Rul. 2014-29, I.R.B. No. 2014-52, December 22, 2014).