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Rev. Rul. 2019-21: No change to interest rates for tax overpayments, underpayments

Interest rates for tax overpayments, underpayments

The IRS today released an advance version of Rev. Rul. 2019-21 providing the rates of interest for tax overpayments and tax underpayments for the fourth quarter of 2019 (the calendar quarter beginning October 1, 2019).

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A related IRS release—IR-2019-146—explains that the interest rates will remain the same for the fourth quarter of 2019, as follows: 

  • 5% for overpayments
  • 4% for overpayments of a corporation
  • 2.5% for the portion of a corporate overpayment exceeding $10,000
  • 5% for underpayments
  • 7% for “large corporate underpayments”


Read Rev. Rul. 2019-21 [PDF 288 KB]

Background

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 tax period is the federal short-term rate plus one-half (0.5) of a percentage point.

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