IR-2020-270: Interest rates remain the same for the first quarter of 2021

Internal Revenue Service (IRS) sent this bulletin at 12/03/2020 02:08 PM EST

IRS Newswire

December 3, 2020

Issue Number: IR-2020-270

Inside This Issue

Interest rates remain the same for the first quarter of 2021

WASHINGTON – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Jan. 1, 2021. The rates will be:

three (3) percent for overpayments [two (2) percent in the case of a corporation];
one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000;
three (3) percent for underpayments; and
five (5) percent for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of 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 Oct. 2020 to take effect Nov. 1, 2020, based on daily compounding.

Revenue Ruling 2020-28, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2020-52, dated Dec. 21, 2020.

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IR-2020-270: Interest rates remain the same for the first quarter of 2021

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Issue Number: IR-2020-270

Inside This Issue