The interest rates on overpayments and underpayments are unchanged from the first quarter of 2021 (Rev Rul. 2021-6). The rates are:
The 3% rate is used to figure estimated tax penalties for individuals for the first 15 days of April.
A portion of earnings withheld by an employer or put into a retirement plan for distribution to the employee at a later date. If certain legal requirements are met, the deferred amount is not taxable until actually paid, for example, after retirement.