By Payroll and Entitlements Editorial Staff
The Internal Revenue Service has announced that interest rates will remain the same for the calendar quarter beginning April 1, 2019. The interest rates are as follows: six percent for overpayments (five percent in the case of a corporation); six percent for underpayments; eight percent for large corporate underpayments; and three-and-one-half percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.
These interest rates are computed from the federal short-term rate based on daily compounding determined during January 2019 (IR-2019-21, February 25, 2019; Rev. Rul. 2019-05, I.R.B. No. 2019-11, March 11, 2019).
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