IR-2016-41, March 16, 2016 WASHINGTON — The Internal Revenue Service today announced that interest rates have increased for the calendar quarter beginning April 1, 2016. The rates will be: four (4) percent for overpayments [three (3) percent in the case of a corporation]; one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000; four (4) percent for underpayments; and six (6) percent 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 2016 to take effect Feb. 1, 2016, based on daily compounding. The federal short-term rate has increased from 0% to 1%. This is the first change to the interest rates since the fourth calendar quarter of 2010 when the federal short-term rate decreased from 1% to 0%. Revenue Ruling 2016-06 PDF, announcing the rates of interest, will appear in Internal Revenue Bulletin 2016-14, dated April 4, 2016. The Revenue Ruling provides the corrected interest rates for the second quarter (April to June 2016). Follow the IRS on New Media Subscribe to IRS Newswire
