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IRS Interest Rates Remain Unchanged for Q1 2012

December 4th, 2011 by Filed under: Tax Law Changes, Tax News

IRS interest rates Q3 2011The IRS has announced that interest rates will not change for the first quarter of 2012, which begins on January 1, 2012 and goes through March 31, 2012.

Interest Rates for Q1 2012

IRS interest rates will continue to be charged as follows:

  • 3% for overpayments (2% for corporations)
  • 3% for underpayments
  • 5% for large corporate underpayments
  • 0.5% for the portion of a corporate overpayment in excess of $10k.


Additionally, the 3% IRS underpayment interest rate applies to estimated tax underpayments for the first quarter of 2012 and will continue through April 15, 2012. The federal short-term rate will also remain the same throughout this period of time.

How Interest Rates are Determined

The IRS Code states that the interest rate is determined on a quarterly basis, computed from the federal short-term rate (compounded daily) during October 2011 to take effect on November 1st of this year.

Rates for Non-Corporation Taxpayers

For non-corporation taxpayers, the overpayment and underpayment rate is calculated by taking the federal short-term rate and adding three percentage points.

Rates for Small Corporations

For corporations, the underpayment rate is calculated by taking the federal short-term rate and adding three percentage points, whereas the overpayment rate adds two percentage points to the federal short-term rate.

Rates for Large Corporations

The rate for large corporate underpayments is calculated by taking the federal short-term rate and adding five percentage points. The rate on the portion of corporate overpayments (of taxes greater than $10k) is calculated by taking the federal short-term rate and adding one-half of a percentage point.

Learn More

For more information, visit the IRS Website or consult one of our expert tax professionals for free today.


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