Corporate interest rates unchanged for first quarter of 2021
The Internal Revenue Service in early December announced that interest rates will remain the same for the calendar quarter beginning January 1, 2021.
The rates will be:
■ 3 percent for overpayments 2 percent in the case of a corporation;
■ 0.5 percent for the portion of a corporate overpayment exceeding $10,000;
■ 3 percent for underpayments;
■ and 5 percent for large corporate underpayments.
The rate of interest is determined on a quarterly basis under the IRS codes. The overpayment and underpayment rate is the federal short-term rate plus 3 percentage points for taxpayers that are not corporations.
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 October 2020 to take effect Nov. 1, 2020, based on daily compounding.
