The IRS has announced that the interest rates used for overpayments and underpayments by taxpayers will remain the same for the 2nd quarter, which begins April 1, 2025.

For individuals, the rates for overpayments and underpayments will be 7% per year, compounded daily.

Other interest rates were announced as follows:

• 7% for overpayments (payments made over the amount owed), 6% for corporations.
• 4.5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For all taxpayers besides corporations, the over/under payment rate is the federal short-term rate plus three percentage points.

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 (0.5) of a percentage point.



The interest rates announced are computed from the federal short-term rate determined during January 2025.