IRS News:
PHOENIX – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1, 2016.
The rates will be:
- 4 percent for overpayments [3 percent in the case of a corporation];
- 4 percent for underpayments;
- 6 percent for large corporate underpayments; and
- 1 and 1.5 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 3 percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 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 (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during April 2016 to take effect May 1, 2016, based on daily compounding.
Revenue Ruling 2016-12, announcing the rates of interest will appear in Internal Revenue Bulletin 2016-26, dated June 27, 2016.
