The US Internal Revenue Service (IRS) announced in a release IR-2024-220 on Wednesday, 21 August 2024, that interest rates will remain the same for the calendar quarter beginning 1 October 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.

The complete list of the new rates are as follows:

  • 8% for overpayments (payments made in excess of the amount owed), 7% for corporations;
  • 5.5% for the portion of a corporate overpayment exceeding USD 10,000;
  • 8% for underpayments (taxes owed but not fully paid);
  • 10% for large corporate underpayments.

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 USD 10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced on 21 August 2024 are computed from the federal short-term rate determined during July 2024.