🌟 IRS Announcement: Interest Rates Hold Steady for Q1 2026

THE PRESS CENTER | BREAKING NEWS | IRS

NOVEMBER 22, 2025 AT 1:18 PM

WASHINGTON — November 13, 2025 The Internal Revenue Service (IRS) has announced that interest rates will remain unchanged for the calendar quarter beginning January 1, 2026. This consistency provides taxpayers with clarity and stability as they plan ahead for the new year.

✨ What This Means for You

• Individuals:
  • Overpayments (when you pay more than you owe) → 7% per year, compounded daily
  • Underpayments (when you owe taxes not fully paid) → 7% per year, compounded daily
• Corporations:
  • Overpayments → 6% per year
  • Overpayments exceeding $10,000 → 4.5% per year
  • Underpayments → 7% per year
  • Large corporate underpayments → 9% per year

🔍 How These Rates Are Determined

• Interest rates are set quarterly under the Internal Revenue Code.
• For individual taxpayers, both overpayment and underpayment rates equal the federal short-term rate + 3 percentage points.
• For corporations:
  • Underpayment rate = federal short-term rate + 3 percentage points
  • Overpayment rate = federal short-term rate + 2 percentage points
  • Large corporate underpayment rate = federal short-term rate + 5 percentage points
  • Corporate overpayment exceeding $10,000 = federal short-term rate + 0.5 percentage point

These rates are based on the federal short-term rate determined in October 2025, ensuring they reflect current economic conditions.

📘 Official Publication

The detailed guidance is available in Revenue Ruling 2025-22, which will be published in Internal Revenue Bulletin 2025-48 on November 24, 2025.

💡 Why This Matters

• Predictability: Knowing rates in advance helps individuals and businesses plan finances with confidence.
• Fairness: Overpayments earn interest, ensuring taxpayers are compensated for paying more than required.
• Accountability: Underpayments accrue interest, encouraging timely and accurate tax payments.

🌟 Encouragement for Taxpayers

This announcement is more than just numbers—it’s a reminder that financial clarity empowers you. By staying informed:

• You can avoid unnecessary costs by paying taxes on time.
• You can maximize returns if you’ve overpaid.
• Businesses can strategically plan cash flow with confidence in stable rates.

Think of these rates as tools: they reward diligence and encourage responsibility. With this knowledge, you are better equipped to make smart financial decisions in 2026.

SOURCE CREDIT: https://www.irs.gov/newsroom