September 26, 2018 10:07 pm

IRS Interest Rates Unchanged for 4th Quarter

The IRS may adjust interest rates for various purposes at various times. For example, the rates for overpayments and underpayments of income tax are adjusted quarterly.

Interest rates for Q4 in 2018. The interest rates on overpayments and underpayments are unchanged for the fourth quarter of 2018, which runs from through October 1, 2018 through December 31, 2018 (Rev Rul. 2018-25). The rates are:

  • Noncorporate overpayments and underpayments: 5%
  • Corporate underpayments: 5% generally but 7% for large corporate underpayments (generally underpayments exceeding $100,000)
  • Corporate overpayments: 4% generally but 2.5% for corporate overpayments exceeding $10,000

Note: These are the rates that apply to underpayments of estimated tax for the fourth quarter of 2018, so it is advisable to review withholding and estimated tax payments and make corrections to minimize underpayments that may be penalized.

Tax Glossary

Grantor trust rules

Tax rules that tax the grantor of a trust on the trust income.

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