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Interest Rates for Second Quarter of 2016 to Remain the Same

MAR. 14, 2016

IR-2016-41

DATED MAR. 14, 2016
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Citations: IR-2016-41
Interest Rates Remain the Same for the Second Quarter of 2016
[Editor's Note: The IRS corrected the interest rates on March 16, 2016, reflecting increases for the second quarter of 2016.]

 

March 14, 2016

 

 

WASHINGTON -- The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning April 1, 2016. The rates will be:

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];

  • one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

  • three (3) percent for underpayments; and

  • five (5) percent for large corporate underpayments.

 

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.

The interest rates announced today are computed from the federal short-term rate determined during Jan. 2016 to take effect Feb. 1, 2016, based on daily compounding.

Revenue Ruling 2016-06, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2016-13, dated March 28, 2016.

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