PHOENIX — The Internal Revenue Service announced last week that interest rates will remain the same for the calendar quarter beginning July 1. The rates will be:
- 3 percent for overpayments – 2 percent in the case of a corporation
- 3 percent for underpayments
- 5 percent for large corporate underpayments
- .5 percent for the portion of a corporate overpayment exceeding $10,000
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 of a percentage point.
The interest rates announced last week are computed from the federal short-term rate determined during April 2014 to take effect May 1, 2014, based on daily compounding.
Submitted by the Internal Revenue Service
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