Interest rates increase for the second quarter of 2022 02.23.22 107
Channel: Accounting Instruction, Help, & How To
Date: 23/02/2022

Interest rates increase for the second quarter of 2022
https://www.irs.gov/newsroom/interest-rates-increase-for-the-second-quarter-of-2022
https://accountinginstruction.info/
The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning April 1, 2022. The rates will be:

4% for overpayments (3% in the case of a corporation);
1.5% for the portion of a corporate overpayment exceeding $10,000;
4% for underpayments; and
6% 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 January 2022 to take effect February 1, 2022, based on daily compounding.

Revenue Ruling 2022-05 PDF announcing the rates of interest, will appear in Internal Revenue Bulletin 2022-10, dated March 7, 2022.