New interest rates for penalties and reimbursements starting October 1st

The Internal Revenue Service announced that interest rates will increase for the calendar quarter beginning October 1, 2022.

Here is a complete list of the new rates:

• 6% for overpayments - 5% for corporations (payments made in excess of the amount owed).

• 3.5% for the portion of a corporate overpayment exceeding $10,000.

• 6% for underpayments (taxes owed but not fully paid).

• 8% for large corporate underpayments.

For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, for 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 2022.

The interest rates announced are computed from the federal short-term rate determined during July 2022. Revenue Ruling 2022-15, announcing the rates of interest, appeared in Internal Revenue Bulletin 2022-35, dated August 29, 2022.