The Internal Revenue Service held its quarterly interest rates steady for the fourth quarter of 2026, keeping the rate for individual tax overpayments and underpayments at 7 percent per year, compounded daily, the agency said.
The IRS sets interest rates every quarter based on the federal short-term rate. For this quarter, the rate was determined using the federal short-term rate as established in July 2026.
Corporate tax interest rates vary by situation. Corporations face a 6 percent rate on overpayments generally, but only 4.5 percent on the portion of an overpayment exceeding $10,000. Underpayments by corporations are charged at 9 percent. The rate for large corporate underpayments is set at 9 percent.
The Internal Revenue Code mandates that the IRS set interest rates on a quarterly basis. The detailed rates were published in Revenue Ruling 2026-15, which appeared in the Internal Revenue Bulletin on August 31, 2026.