May 24 2023

IRS Releases Q3/2023 Interest Rates on Overpayments and Underpayments

Source: IBFD Tax Research Platform News

On 22 May 2023, the US Internal Revenue Service (IRS) issued a news release (IR-2023-104) announcing interest rates on tax overpayments (i.e. tax refunds) and tax underpayments (i.e. tax assessments and late tax payments) for the calendar quarter beginning 1 July 2023 (Revenue Ruling 2023-11).

The interest rates, which apply to amounts bearing interest during the third calendar quarter, are as follows:

  • 7% for non-corporate overpayments (payments made in excess of the amount owed);
  • 6% for corporate overpayments;
  • 4.5% for corporate overpayments exceeding USD 10,000;
  • 7% for underpayments (taxes owed but not fully paid); and
  • 9% for large corporate underpayments.

Note: Under the Internal Revenue Code, interest rates are 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.