Interest rates will remain unchanged for the calendar quarter beginning January 1, 2022, according to the Internal Revenue Service. The following are the rates:
Overpayments are subject to a 3% penalty (two (2) percent in the case of a corporation), 0.5 percent for the amount of a corporate overpayment exceeding $10,000, underpayments are subject to a 3% penalty, and big corporate underpayments are subject to a 5% penalty.
The rate of interest is calculated quarterly under the Internal Revenue Code. The overpayment and underpayment rate for taxpayers who are not companies is the federal short-term rate + 3 percentage points.
In most cases, the underpayment rate for a corporation is equal to the federal short-term rate plus three percent. and the overpayment rate is equal to the federal short-term rate + 2%. The federal short-term rate + 5 percentage points is applied to substantial business underpayments. The federal short-term rate plus one-half (0.5) of a percentage point applies to the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period.