Interest rates to decrease for 3rd quarter 2020
Tuesday, June 16, 2020

Interest rates to decrease for 3rd quarter 2020

By Payroll and Entitlements Editorial Staff

The IRS has announced that interest rates will decrease for the third quarter of 2020, beginning July 1, 2020. The interest rates will be 3% for overpayments (2% in the case of a corporation) and 3% for underpayments, (5% for large corporate underpayments) and 0.5% for the portion of a corporate overpayment exceeding $10,000. (IRS News Release IR-2020-113, June 4, 2010; Rev. Rul. 2020-13, IRB 2020-26, dated June 22, 2020.)

The states of Alabama and South Carolina follow the federal underpayment rate. Pennsylvania follows the federal rate in effect as of January 1 of the calendar year, without regard to quarterly changes. Illinois follows the federal underpayment rate as of January 1 and July 1 of the calendar year. Additionally, Virginia's interest rate on tax underpayments is the federal interest rate plus 2%, while Arizona's is the federal short-term rate plus three percentage points.

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