The IRS has just announced that interest rates are staying the same for the next quarter, starting July 1, 2024. Here’s a quick rundown of the rates:
- For individuals, both overpayments and underpayments will have an interest rate of 8% per year, compounded daily.
- Corporations will have a rate of 7% for overpayments.
- If a corporation’s overpayment exceeds $10,000, the rate drops to 5.5%.
- Underpayments for everyone will remain at 8%.
- Large corporate underpayments will have a rate of 10%.
These rates are set quarterly based on the federal short-term rate plus a few extra percentage points, depending on the situation. For most taxpayers, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. For corporations, it’s a bit different: overpayments are the federal short-term rate plus 2 percentage points, and underpayments are the federal short-term rate plus 3 percentage points. Large corporate underpayments add an extra 5 percentage points, and overpayments exceeding $10,000 get an extra half a percentage point.
These rates are based on the federal short-term rate determined in April 2024. You can find all the details in Revenue Ruling 2024-11PDF, which will be published in the Internal Revenue Bulletin 2024-24 on June 10, 2024.
