IRS sets quarterly interest rates for tax overpayments and underpayments at 6% for individuals and corporations for the second quarter of 2026, with special rates for large corporate underpayments (8%) and corporate overpayments exceeding $10,000 (3.5%).
→ View in IRS Internal Revenue BulletinWhat It Does
This guidance establishes the quarterly interest rates that apply to tax overpayments and underpayments for the period April 1, 2026 through June 30, 2026, based on the federal short-term rate of 3% determined in January 2026. The rates also apply to estimated tax underpayments and deposits under section 6603.
Who Is Affected
All taxpayers with tax overpayments or underpayments, corporations with large underpayments (generally over $100,000), corporations with overpayments exceeding $10,000, taxpayers with estimated tax underpayments, and taxpayers making deposits under section 6603.
Key Provisions
- Standard overpayment and underpayment rate: 6% for individuals and corporations
- Corporate overpayment rate for amounts exceeding $10,000: 3.5%
- Large corporate underpayment rate: 8%
- Rate for section 6603 deposits: 3%
- Federal short-term rate (rounded): 3% based on daily compounding
- Rates apply to amounts bearing interest during April 1-June 30, 2026
- Same 6% rate applies to estimated tax underpayments under sections 6654 and 6655
- Interest factors for daily compound interest published in Rev. Proc. 95-17 tables
Practical Implications
Practitioners should update their tax software and interest calculations for any overpayments, underpayments, or estimated tax penalties that will accrue interest during the second quarter of 2026. Review client situations involving large corporate underpayments or corporate overpayments exceeding $10,000 to apply the correct differential rates. Use the published interest factor tables for precise daily compounding calculations.
Supersedes / Modifies
None identified.
Related Code Sections
6621, 6622, 6601, 6603, 6654, 6655, 1274