The Internal Revenue Service on Monday announced interest rates will remain the same for the calendar quarter beginning July 1.
The rates will be:
• 3 percent for overpayments (2 percent for corporations);
• 3 percent for underpayments;
• 5 percent for large corporate underpayments; and
• One-half of a percent (0.5) 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 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 taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The announced interest rates are computed from the federal short-term rate determined during April to take effect May 1, 2014, based on daily compounding.
The next rates will appear in Internal Revenue Bulletin 2014-27, dated June 30.