The IRS has announced the overpayment/underpayment rates for the calendar quarter beginning January 1, 2018. The interest rate will be 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments and 6 percent for large corporate underpayments. For the portion of a corporate overpayment exceeding $10,000 the rate is 1.5 percent. The interest rates were computed by using the federal short-term rate based on daily compounding determined during October 2017.
The Internal Revenue Code provides that the rate of interest is to be determined on a quarterly basis. Generally, for taxpayers other than corporations, the overpayment/underpayment rate is the federal short-term rate plus three percentage points. However, for a corporation, the underpayment rate is the federal short-term rate plus three percentage points. In addition, the overpayment rate is the federal short-term rate plus two percentage points. Moreover, the rate for large corporate underpayments is the federal short-term rate plus five percentage points. Finally, the rate on the portion of a corporate overpayment exceeding $10,000 for a tax period is the federal short-term rate plus one-half of a percentage point.
Rev. Rul. 2017-25