WASHINGTON – The Internal Revenue Service announced that interest rates for the calendar quarter beginning April 1, 2011, will increase by one percentage point. The rates will be:
- four percent for overpayments (three percent in the case of a corporation);
- four percent for underpayments;
- six percent for large corporate underpayments; and
- one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.
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.
- 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 rate for determining the addition to tax for failure to pay estimated tax for the first 15 days in April 2011 is the 4 percent rate that applied to underpayments of tax during the first calendar quarter in 2011.
The interest rates announced here are computed from the federal short-term rate during January 2011 to take effect February 1, 2011, based on daily compounding.
Revenure Ruling 2011-5with the rates appears in Internal Revenue Bulletin No. 2011-13, dated March 28, 2011.