Interest

The IRS charges underpayment interest when you don't pay your tax, penalties, additions to tax or interest by the due date. The underpayment interest applies even if you file an extension.

If you pay more tax than you owe, we pay interest on the overpayment amount.

Underpayment and overpayment interest rates vary and may change quarterly. Changes don't affect the interest rate charged for prior quarters or years. See Quarterly Interest Rates for more information.

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When does the IRS Charge Interest?

We charge interest when a taxpayer has an unpaid liability comprised of tax, penalties, additions to tax, or interest.

Stop and Start Dates for Underpayment Interest

In general, we charge interest on underpayments starting on the due date of the amount you owe and will continue to accrue until the balance is paid in full:

If you received a notice, you will not be charged interest on the amount shown if you pay the amount owed in full on or before the "pay by" date.

Pay Your Balance

Pay your balance in full to stop underpayment interest from accumulating daily.

Apply for a Payment Plan

If you can't pay the full amount of your taxes on time, pay what you can now and apply for a payment plan. You can enter into an Installment Agreement to pay the remaining balance. Interest will continue to accrue daily on any amount not paid, including on both penalties and interest.

Reduce Interest You Owe

If you're able to reduce the amount of the tax or penalties you owe by filing an amended return or qualifying for penalty relief, we'll automatically reduce the related interest. We don't remove or reduce interest for reasonable cause or as first-time relief.

How to Dispute Interest You Owe

We may reduce the amount of interest you owe only if the interest is applied because of an unreasonable error or delay by an IRS officer or employee.

To dispute interest due to an unreasonable error or IRS delay, submit Form 843, Claim for Refund and Request for AbatementPDF or send us a signed letter requesting that we reduce or adjust the overcharged interest. For more information, see Instructions for Form 843PDF.

When does the IRS pay Interest?

Stop and Start Dates for Overpayment Interest

In general, we pay interest on the amount you overpay starting from the later of the:

  • Tax return filing due date
  • Late filed tax return received date
  • Date we get your return in a format we can process
  • Date the payment was made

We stop paying interest on overpayments on the date we refund your overpayment (and interest) or offset it to an outstanding liability.

Exception: We have administrative time (typically 45 days) to issue your refund without paying interest on it.

How to Dispute Insufficient Interest Paid

If you think we underpaid interest owed to you on refunds or credits you're eligible for, you can file an informal claim or complete and send Form 843PDF for us to consider allowing additional overpayment interest. Make sure to include your own computation and reason for making the request for additional interest on Line 7 (see Instructions for Form 843).

Your request must be received within six years of the date of the scheduled overpayment.

Get Help

For help with interest:

Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call

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