IRS Interest Rates Decreased of Third Quarter; The Internal Revenue Service (IRS) announced its taxpayers in United States that the interest rates will decrease for the third quarter of the year 2020. It means that for the calendar quarter beginning July 1, 2020, all taxpayers throughout USA will face a decline in the interest rates from IRS as that of the first & second quarter of current year.
According to the latest news, IRS Third Quarter Interest Rates 2020 will be as follows:
- 5% interest rate for large corporate under payments.
- 3% interest rate for other under payments.
- 3% interest rate for over payments (while 2% interest rates in the case of a corporation).
- 5% interest rate for the portion of a corporate over payment more than $10,000.
It must be noted that the interest rates of the first quarter and interest rates of the second quarter were same as before.
Interest Rates Decreased for 3rd Quarter of Year 2020
- The rate of interest is determined on a quarterly basis under the Internal Revenue Code of USA.
- Specifically in the case of taxpayers other than corporations, the over payment as well as underpayment rate is the federal short-term rate in addition to 3 percentage points.
- In the case of a corporation, the underpayment rate is comprised of the federal short-term rate in addition to 3 percentage points.
- In the case of a corporation, the over payment rate is comprised of the federal short-term rate in addition to 2 percentage points.
- In the case of large corporate, the rate for underpayments is the federal short-term rate in addition to 5 percentage points.
- The interest rate on the portion of a corporate over payment of tax exceeding $10,000 for a taxable period is comprised of the federal short-term rate in addition to one-half (0.5) of a percentage point.
- Must note that these interest rates are calculated from the federal short-term rate determined during April 2020, to be effective from May 1, 2020, on the basis of daily compounding.
- For our readers’ guidance, we are attaching Revenue Ruling 2020-13 (PDF)that contains complete details on the rates of interest in the United States for 2020 for the third quarter.
You can book an appointment with our representative to get more details on what is the current interest rate in the US or what are the U.S. FED rates in your state.