Interest Rates Increase for the First Quarter of 2023

IR-2022-206, November 29, 2022

WASHINGTON — The Internal Revenue Service announced that interest rates will increase for the calendar quarter beginning January 1, 2023.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily, up from 6% for the quarter that began on October 1. Here is a complete list of the new rates:

  • 7% for overpayments (payments made more than the amount owed), and 6% for corporations.

  • 4.5% for the portion of a corporate overpayment exceeding $10,000.

  • 7% for underpayments. (taxes owed but not fully paid)

  • 9% for large corporate underpayments.

Under the Internal Revenue Code, the interest rate is determined every quarter. The overpayment and underpayment rate is the federal short-term rate plus 3 percentage points for taxpayers other than corporations.

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 national 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 national short-term rate plus one-half (0.5) of a percentage point.

Today's interest rates are computed from the federal short-term rate determined during October 2022. See the revenue ruling for details.

Revenue Ruling, 2022-23, announcing the interest rates will appear in Internal Revenue Bulletin 2022-51, dated December 19, 2022.

To read more about expected interest rate increases in 2023:

https://www.irs.gov/newsroom/interest-rates-increase-for-the-first-quarter-of-2023