On November 13, the Internal Revenue Service (IRS) of the United States published a new detailed document on tax rate determinations in a press release, providing guidelines for the tax rates next year and announcing that the calendar quarter rates starting from January 1, 2026, will remain unchanged.
For individuals, the interest rates on overpayments (payments made in excess of the amount owed) and underpayments (taxes owed but not fully paid) are both at an annual rate of 7%, compounded daily.
• Interest rates for individuals on overpaid taxes (amount exceeding the owed tax) is 7%, while for companies it is 6%;
• For companies, the interest rate on overpaid taxes exceeding $10,000 is 4.5%;
• The interest rate on underpayments (unpaid taxes) is 7%;
• Large company underpayment rate is 9%.
For example, if a company overpaid taxes by more than $10,000, let’s say a company overpaid $15,000 in taxes, then the interest on the first $10,000 is calculated at the regular company overpayment rate (6%); the remaining $5,000 (i.e., $15,000 – $10,000) is calculated at 4.5%.
According to the Internal Revenue Code of the United States, tax rates are determined quarterly. Generally, the interest rates for company underpayments are: “federal short-term rate + 3 percentage points”; interest rates for company overpayments are: “federal short-term rate + 2 percentage points”; the interest rate for large company underpayments is: “federal short-term rate + 5 percentage points”; and for company overpayments exceeding $10,000, the interest rate is: “federal short-term rate + 0.5 percentage points”.
For taxpayers other than companies (such as individuals and other entities), the interest rates on overpayments and underpayments are: “federal short-term rate + 3 percentage points”.
The press release stated that the announced rates are based on the federal short-term rate determined in October 2025. For more details, please refer to the tax rate determination detailed document released by the tax authorities: Revenue Ruling 2025-22 (in PDF format).
This document will be formally issued in the Internal Revenue Bulletin 2025-48, scheduled for November 24, 2025.
Please note that the press release may not be updated after publication. Verify the date before relying on the content.
*[Note]*:
Revenue Ruling: A formal interpretive document issued by the IRS to explain specific provisions of the tax law and how the IRS will apply and interpret them in certain circumstances. It carries authority and is crucial for tax professionals, as taxpayers and accountants typically adhere to it.
Internal Revenue Bulletin (IRB): The official weekly publication issued by the IRS, which includes revenue rulings, procedural rulings, Treasury decisions, various notices, and other documents related to tax law enforcement.
IRB serves as the official repository of IRS regulations and guidelines. Once a document is published in the IRB, it carries formal legal force or administrative authority close to legal force.