US Tax information update

Interest rates increase for the second quarter of 2022

The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning April 1, 2022. The rates will be:

  • 4% for overpayments (3% in the case of a corporation);
  • 1.5% for the portion of a corporate overpayment exceeding $10,000;
  • 4% for underpayments; and
  • 6% 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.

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 interest rates announced today are computed from the federal short-term rate determined during January 2022 to take effect February 1, 2022, based on daily compounding.

Revenue Ruling 2022-05 announcing the rates of interest, will appear in Internal Revenue Bulletin 2022-10, dated March 7, 2022.

Source: https://www.irs.gov/newsroom/interest-rates-increase-for-the-second-quarter-of-2022