Tax Interest Rates remain the same for the fourth quarter of 2020
On September 3, 2020, WASHINGTON - The Internal Revenue Service announced the issue of maintaining the same interest rate from October 1, 2020.
The rate will be no different from Q3 2020:
3% for overpayments (2% in the case of a corporation)
0.5% for the portion of a corporate overpayment exceeding $ 10,000
3% percent for underpayments
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 the corporation, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
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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 July 2020 to take effect August 1, 2020, based on daily compounding.
It can be said that the interest rate remains the same as compared to Q3 2020 and it has decreased by 2% compared to Q2 2020
Resource: The Internal Revenue Service (IRS)
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