The Internal Revenue Service announced that interest rates will remain
the same for the calendar quarter beginning Jan. 1, 2012. The rates will be:
- three (3) percent for overpayments [two (2) percent in
the case of a corporation]; - three (3) percent for underpayments;
- five (5) percent for large corporate underpayments; and
- one-half (0.5) percent for the portion of a corporate
overpayment exceeding $10,000.
The 3 percent rate also applies to estimated tax underpayments for the first
calendar quarter in 2012 and for the first 15 days in April 2012.
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. Further, the federal short-term rate that
applies during the third month following the taxable year also applies during
the first 15 days of the fourth month following the taxable year.
The interest rates announced today are computed from the federal short-term
rate during October 2011 to take effect Nov. 1, 2011, based on daily
compounding.
Revenue Ruling 2011-32, announcing the rates of interest, is attached and will
appear in Internal Revenue Bulletin No. 2011-52, dated Dec. 27, 2011.