IRS sets and publishes current and prior years interest rates quarterly for individuals and businesses to calculate interest on underpayment and overpayment balances.
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On this page
- Current year 2025 quarterly interest rates
- Prior years quarterly interest rates
- How we calculate interest rates
- Interest rate categories and formulas
- Table 1: Tax underpayments interest formulas
- Table 2: Tax overpayments interest formulas
- Laws and regulations
- Related topics
Current year 2025 quarterly interest rates
2025 interest rates by category
| Interest categories | 4th quarter(Oct-Dec) | 3rd quarter(Jul-Sep) | 2nd quarter(Apr-Jun) | 1st quarter(Jan–Mar) |
|---|---|---|---|---|
| Non-corporate overpayment (for example, individual) | 7% | 7% | 7% | 7% |
| Corporate overpayment | 6% | 6% | 6% | 6% |
| Underpayment (corporate and non-corporate) | 7% | 7% | 7% | 7% |
| GATT (part of a corporate overpayment exceeding $10,000) | 4.5% | 4.5% | 4.5% | 4.5% |
| Large corporate underpayment (LCU) | 9% | 9% | 9% | 9% |
| Internal Revenue Code (IRC) 6603 deposit (federal short-term rate) | 4% | 4% | 4% | 4% |
Source
- 1st quarter rates – Internal Revenue Bulletin: 2024-49
- 2nd quarter rates – Internal Revenue Bulletin: 2025-13
- 3rd quarter rates – Internal Revenue Bulletin: 2025-23
- 4th quarter rates – Internal Revenue Bulletin 2025-37
Prior years quarterly interest rates
2024 interest rates by category
2023 interest rates by category
2022 interest rates by category
2021 interest rates by category
2020 interest rates by category
2019 interest rates by category
2018 interest rates by category
2017 interest rates by category
How we calculate interest rates
Interest will accrue on any unpaid tax, penalties and interest until the balance is paid in full. The interest rates we charge and pay on overpayments and underpayments are compounded daily. This means the interest is assessed on the previous day’s balance plus the interest. For details, see Interest.
We use the federal short-term rate based on daily compounding interest to calculate the interest we charge and pay. Changes to the rate don’t affect the interest rate charged for prior quarters or years.
Interest rate categories and formulas
Different interest rates apply to underpayments and overpayments, depending on whether you’re an individual or a corporation. Use these tables to find the formula to calculate the rate for your type of interest.
Table 1: Tax underpayments interest formulas
| Type of interest | Applies to | Formula |
|---|---|---|
| Standard | Corporate and non-corporate underpayments | Federal short-term rate plus 3 percentage points |
| Large corporate underpayment | Underpayments of tax exceeding $100,000 by C-corporations | Federal short-term rate plus 5 percentage points |
Table 2: Tax overpayment interest formulas
| Type of interest | Applies to | Formula |
|---|---|---|
| Standard | Non-corporate overpayments | Federal short-term rate plus 3 percentage points |
| Corporate | Corporate overpayments | Federal short-term rate plus 2 percentage points |
| Large corporate overpayment | Corporate overpayments exceeding $10,000 | Federal short-term rate plus 0.5 of a percentage point |
