Interest Rates to Increase for 2018 2nd Quarter, IRS Says

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By Keith Hill

Interest rates for tax underpayments and overpayments are to increase for the second quarter starting April 1, 2018, the Internal Revenue Service said March 7.

The rise in rates is the first quarterly increase in two years.

The interest rate for corporate tax overpayments is to increase to 4 percent from 3 percent, while the rate for corporate underpayments is to increase to 5 percent from 4 percent, the IRS said ( Rev. Rul. 2018-07). The rate for large corporate underpayments is to increase to 7 percent from 6 percent, the agency said. The interest rate for corporate overpayments exceeding $10,000 is to increase to 2.5 percent from 1.5 percent, the IRS said.

The interest rate for noncorporate tax overpayments and underpayments is to increase to 5 percent from 4 percent, the IRS said.

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

To contact the reporter on this story: Keith Hill in Washington at khill@bloombergtax.com. To contact the editor responsible for this story: Michael Baer at mbaer@bloombergtax.com.

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