IRS announces underpayment, overpayment rates for 2021 Fourth Quarter.

August 31, 2021

The IRS has announced (Rev. Rul. 2021-17) the interest rates for taxpayer underpayments and overpayments for the fourth quarter of 2021:

3% for overpayments [2% in the case of a corporation];
 an additional 0.5% for the portion of a corporate overpayment exceeding $10,000;
3% for underpayments; and
5% for large corporate underpayments. 

These rates apply quarter by quarter. If you have a tax debt that accrues interest over multiple quarters, the rate used to accrue the interest may be different for each quarter. Likewise, the rate for refunds is redetermined quarterly.

The 3% underpayment rate also applies for computing penalties for underpayment of estimated tax.

A "large corporate underpayment" is one that exceeds $100,000.

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