The IRS recently announced that interest rates will remain unchanged for the fourth quarter of 2025, effective Wednesday, Oct. 1.
For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily. The interest rates remain:
- 7% for overpayments (payments made in excess of 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 taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Read more.