The Internal Revenue Service recently announced that interest rates have increased for the calendar quarter beginning April 1, 2016. The rates will be:
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 January 2016 to take effect Feb. 1, 2016, based on daily compounding. The federal short-term rate has increased from 0% to 1%. This is the first change to the interest rates since the fourth calendar quarter of 2010 when the federal short-term rate decreased from 1% to 0%. Revenue Ruling 2016-06, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2016-14, dated April 4, 2016. The attached Revenue Ruling provides the corrected interest rates for the second quarter (April to June 2016).
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Pat Kolodziej
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