The US Internal Revenue Service (IRS), announced – on 6 March 2025 – that the interest rates will remain the same for the calendar quarter beginning 1 April 2025.
For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.
Here is a complete list of the new rates:
- 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
- 4.5% for the portion of a corporate overpayment exceeding USD 10,000.
- 7% for underpayments (taxes owed but not fully paid).
- 9% for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined quarterly. 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 are computed from the federal short-term rate determined during January 2025.
Revenue Ruling 2025-7 PDF announcing the interest rates is attached and will appear in Internal Revenue Bulletin 2025-13, dated 24 March 2025.
Earlier, on 21 February 2024, the IRS announced that interest rates for overpayments and underpayments will stay the same for the calendar quarter starting 1 April 2024.
