Interest rates will remain the same for the calendar quarter beginning Jan. 1, 2026, according to the Internal Revenue Service.
For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.
For corporations, the rate for overpayments will be 6%, while the rate will be 7% for underpayments (taxes owed but not fully paid) and 9% for large corporate underpayments.
Interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rates are 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 generally the federal short-term rate plus one-half (0.5) of a percentage point but the rate. The rate will be 4.5% for the portion of a corporate overpayment exceeding $10,000 for 1Q26.
These latest rates are computed from the federal short-term rate determined during October 2025.
Revenue Ruling 2025-22, announcing the rates of interest, will appear in IRB 2025-48, dated Nov. 24.
