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IRS interest rate for third quarter 2014

The Internal Revenue Service has announced the interest rates it charges and pays to taxpayers will remain the same for the calendar quarter beginning July 1, 2014.  These rates are:

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];
  • three (3) percent for underpayments;
  • five (5) percent for large corporate underpayments; and
  • one-half (0.5) 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 2014 to take effect May 1, 2014, based on daily compounding.

Interest rates for the quarter beginning October 1, 2014 will be announced in three months time.

DISCLAIMER: This information is extracted with permission from IRS publications as of the date of this post.  The accuracy of this information is the responsibility of the IRS.   We assume this announced rate to be calculated by the IRS in conformity with requirements of the law.  We are not responsible for verification of the accuracy of the IRS formula-determined interest rates or for updating this information quarterly as the rate changes.

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