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January 8, 2020 1:14 am
IRS Interest Rates for Q1 2020
The interest rates on overpayments and underpayments are unchanged from the fourth quarter of 2019 (Rev Rul. 2019-28). The rates are:
- Noncorporate overpayments and underpayments: 5%
- Corporate overpayments: 4% generally, but 2.5% for corporate overpayments exceeding $10,000
- Corporate underpayments: 5% generally but 7% for large corporate underpayments
The 5% rate is used to figure estimated tax penalties for individuals for the first quarter of 2020 and also the first 15 days of April.
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Tax Glossary
Withholding
An amount taken from income as a prepayment of an individual’s tax liability for the year. In the case of wages, the employer withholds part of every wage payment. Backup withholding from dividend or interest income is required if you do not provide the payer with a correct taxpayer identification number. Withholding on pensions and IRAs is automatic unless you elect to waive withholding.
