The IRS has announced (Rev. Rul. 2023-17) the interest rates for taxpayer underpayments and overpayments for the fourth quarter of 2023:
• 8% for overpayments [7% in the case of a corporation];
• 5.5% for the portion of a corporate overpayment exceeding $10,000;
• 8% for underpayments; and
• 10% for large corporate underpayments.
These rates apply quarter by quarter. If you have a tax debt that accrues interest over multiple quarters, the rate used to accrue the interest may be different for each quarter. Likewise, the rate for refunds is redetermined quarterly.
The 8% underpayment rate also applies for computing penalties for underpayment of estimated tax.
A "large corporate underpayment" is one that exceeds $100,000.
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