November 30, 2004
No Change in Interest Rates for the
WASHINGTON - The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning Jan. 1, 2005. The interest rates are as follows:
First Quarter of 2005
- 5 percent for overpayments [4 percent in the case of a corporation];
- 5 percent for underpayments;
- 7 percent for large corporate underpayments; and
- 2.5 percent for the portion of a corporate overpayment exceeding $10,000.
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 based on daily compounding determined during October 2004.
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