Class for Tax Preparation: IRS Maintains Current Interest Rates Through September 2025

The Internal Revenue Service has announced that interest rates will remain unchanged for the third quarter of 2025, covering the period beginning July 1. This means both individuals and corporations will continue with the same rates for tax overpayments and underpayments through the end of September.

For individuals, the interest rate for both overpayments and underpayments will be 7% per year, compounded daily. For corporations, the interest rate on overpayments will be 6%, while the rate for corporate overpayments exceeding $10,000 will be 4.5%. Underpayments will carry a 7% interest rate for most taxpayers, while large corporate underpayments will accrue interest at a rate of 9%.

Interest rates are set by the IRS on a quarterly basis and are tied to the federal short-term rate, which was determined in April 2025. For individual taxpayers, both the overpayment and underpayment rates are calculated by adding three percentage points to the federal short-term rate. For corporations, the underpayment rate is also the short-term rate plus three percentage points, but the overpayment rate is only two percentage points above the federal short-term rate. In cases where a corporate overpayment exceeds $10,000, the interest rate applied to the excess is the short-term rate plus one-half of a percentage point. Large corporate underpayments are assessed at the short-term rate plus five percentage points.

These rates can affect taxpayers in a variety of ways, from the interest earned on refunds to the cost of unpaid tax balances. With no changes to the rates this quarter, individuals and businesses can continue to plan with confidence through the summer months.

For more information, visit the IRS website at irs.gov.