The IRS has announced that interest rates will remain the same for the calendar quarter beginning Oct. 1. The rates will be:

• 5% for overpayments (4% in the case of a corporation).
• 2.5% for the portion of a corporate overpayment exceeding $10,000.
• 5% for underpayments.
• 7% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined quarterly. 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 are computed from the federal short-term rate determined during July to take effect Aug. 1, based on daily compounding.

Revenue Ruling 2018-25, announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2018-39, dated Sept. 24.