September 10 2018
IRS releases interest rates on tax overpayments and underpayments: Q4/2018
On 7 September 2018, the US Internal Revenue Service (IRS) issued Revenue Ruling 2018-25 with the announcement of the 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 October 2018. The IRS also issued an accompanying News Release (IR-2018-181) dated 7 September 2018. The interest rates, which apply to amounts bearing interest during that calendar quarter, are as follows:
- 5% for non-corporate overpayments;
- 4% for corporate overpayments up to USD 10,000;
- 2.5% for corporate overpayments to the extent in excess of USD 10,000;
- 5% for non-corporate and corporate (other than large corporate) underpayments; and
- 7% for large corporate underpayments (i.e. underpayments in excess of USD 100,000).
- interest factors for daily compound interest for an annual rate of 0.5% (Appendix A); and
- tables including overpayment and underpayment interest rates for prior periods.