The IRS has announced (Rev. Rul. 2024-25) the interest rates for taxpayer underpayments and overpayments for the first quarter of 2025:
• 7% for overpayments [6% in the case of a corporation];
• 4.5% for the portion of a corporate overpayment exceeding $10,000;
• 7% for underpayments; and
• 9% for large corporate underpayments.
The rates are down 1% from fourth quarter 2024. 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 7% 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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