The United States Internal Revenue Service (IRS) has announced that interest rates for the third quarter of 2025 will remain unchanged. Starting July 1, the rates for overpayments and underpayments will continue at 7% for individuals.
The IRS adjusts its interest rates quarterly based on the federal short-term rate. For the third quarter of 2025, the applicable rates are:
- 7% for individual overpayments and underpayments.
- 4.5% for corporate overpayments exceeding $10,000.
- 9% for underpayments by large corporations.
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Interest on Unpaid Taxes
Interest on unpaid taxes accrues from the due date until the balance is fully paid. Additionally, interest is charged in addition to any applicable fines or penalties.
For individual taxpayers, the interest rate is calculated by adding 3 percentage points to the federal short-term rate. For corporations:
- The overpayment rate is adjusted by adding 2 percentage points to the federal short-term rate.
- The underpayment rate is increased by 3 percentage points over the federal short-term rate.
- Large corporate underpayments are subject to an interest rate of the federal short-term rate plus 5 percentage points.
- Corporate overpayments exceeding $10,000 are adjusted by half a percentage point.
Interest on Delayed Refunds
The IRS also pays interest to taxpayers who do not receive their refunds within 45 days of the tax filing deadline.
Interest begins accruing from the filing deadline based on the federal short-term rate plus applicable adjustments. The stability of these rates allows taxpayers to anticipate costs and optimize tax payment and refund strategies.
For further details, visit the official IRS website here.
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