Washington — The Internal Revenue Service announced that interest rates for tax overpayments and underpayments will remain unchanged for the calendar quarter beginning July 1, 2025.
For individual taxpayers, both the rate for overpayments (receiving a refund from the IRS) and underpayments (taxes owed to the IRS) will be 7% per year, compounded
daily.
A comprehensive list of the interest rates is as follows:
-
Overpayments:
- 7% for individuals
- 6% for corporations
- 4.5% for the portion of a corporate overpayment exceeding $10,000
-
Underpayments:
- 7% for individuals and corporations
- 9% for large corporate underpayments
In accordance with the Internal Revenue Code, interest rates are subject to redetermination on a quarterly basis. The rates for taxpayers other than corporations are calculated by adding three percentage points to the federal short-term rate.
For corporations, the underpayment rate is determined by adding three percentage points to the federal short-term rate. The overpayment rate for corporations is the federal short-term rate plus two percentage points. A higher rate applies to large corporate underpayments, set at the federal short-term rate plus five percentage points. For the portion of a corporate overpayment exceeding $10,000 for a given taxable period, the rate is the federal short-term rate plus one-half (0.5) of a percentage point.
These interest rates are computed based on the federal short-term rate that was determined during April 2025.