The IRS will keep interest rates the same for the calendar quarter beginning Jan. 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8 percent per year, compounded daily. The new rates are 8 percent for overpayments (payments made in excess of the amount owed), 7 percent for corporations; 5.5 percent for the portion of a corporate overpayment exceeding $10,000; 8 percent for underpayments (taxes owed but not fully paid); and 10 percent for large corporate underpayments.

Under the Internal Revenue Code, 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 three percentage points. 

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points, and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five 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 of a percentage point. 

The interest rates were computed from the federal short-term rate determined during October 2023. Revenue Ruling 2023-22, announcing the rates of interest, will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.