The IRS in the United States manages the tax system and the IRS also manages to set interest rates for over tax payments and under tax payments for every quarter. For the last quarter of this year, the focus is on the IRS Interest Rates Q4 2025 which covers the period from 1st Oct to 31 Dec 2025. These interest rates affect both personal taxpayers and corporations. If someone owes taxes and delays paying them, then interest is charged. Also when someone over pays the taxes, the IRS pays interest on the refund.
IRS Interest Rates Q4 2025
The IRS Interest Rates Q4 2025 has been officially out. The IRS confirmed that the rate of interest will not be changed. These interest rates are not set randomly but the federal short term rate is the deciding factor. The IRS publishes these updates every quarter in its official revenue rulings and also this 4th quarter interest rates are also mentioned in the Revenue Ruling 2025-18.
IRS Tax Overpayment & Underpayment Interest Rates 2025 – Quick Facts
| Post Title | IRS Interest Rates Q4 2025 |
| Year | 2025 |
| Month | October – December |
| Country Name | United States |
| Issuing Body | Internal Revenue Service |
| Increase in Interest Rates | No Change |
| Interest Rates for Quarter 4 | Remains the same |
| Status | Confirmed |
| Who pays? | In case of Underpayments, Taxpayers pays it and in case of overpayments, IRS pays it |
| Interest Rate Adjustment | Quarterly |
| Post Category | Finance |
| Official Web Portal | www.irs.gov |
irs.gov Tax Overpayments + Underpayments Q4 Interest Rates 2025
The IRS interest rate is the percentage used by the IRS to calculate how much interest taxpayers owe if they underpay or earn if they overpaid. For the last quarter, the rates have not changed.
- For Individuals: If residents owe taxes then they pay an underpayment interest rate of 7% per annum. If residents owe a refund from the IRS then the overpayment interest rate is also 7% per annum.
- For Corporations: If corporations overpaid the taxes then they can earn 6% per annum. If the corporations overpaid the taxes for over $10,000 then they can earn 4.5% per annum. If corporations underpaid the taxes then they need to pay interest of 7% per annum. If the corporation underpays a large amount of tax then they need to pay 9% per annum.
One of the key points to note is that the interest rate for last quarter is stable. This stability is beneficial for taxpayers as it allows for better planning. When rates remain unchanged, businesses can prepare for their quarterly taxes without the risk of sudden interest rate hike.
Important Notes: Interest is compounded daily which means it builds up every single day until the balance is cleared or refunded.
IRS Quarter Wise Interest Rates 2025
Let’s check the quarterly Interest Rate for corporate and non corporate payments:
Non Corporate Overpayments + Underpayments:
| Quarter | Time Period | Interest Rates |
| 1st | 01/01/2025 – 31/03/2025 | 07% |
| 2nd | 01/04/2025 – 30/06/2025 | 07% |
| 3rd | 01/07/2025 – 30/09/2025 | 07% |
| 4th | 01/10/2025 – 31/12/2025 | 07% |
Corporate Overpayments + Underpayments:
| Quarter | Time Period | Overpayment Rate | Underpayment Rate |
| 1st | 01/01/2025 – 31/03/2025 | 06% | 07% |
| 2nd | 01/04/2025 – 30/06/2025 | 06% | 07% |
| 3rd | 01/07/2025 – 30/09/2025 | 06% | 07% |
| 4th | 01/10/2025 – 31/12/2025 | 06% | 07% |
Corporate Overpayments Exceeding $10,000:
| Quarter | Time Period | Interest Rates |
| 1st | 01/01/2025 – 31/03/2025 | 4.5% |
| 2nd | 01/04/2025 – 30/06/2025 | 4.5% |
| 3rd | 01/07/2025 – 30/09/2025 | 4.5% |
| 4th | 01/10/2025 – 31/12/2025 | 4.5% |
Large Corporate Underpayments:
| Quarter | Time Period | Interest Rates |
| 1st | 01/01/2025 – 31/03/2025 | 09% |
| 2nd | 01/04/2025 – 30/06/2025 | 09% |
| 3rd | 01/07/2025 – 30/09/2025 | 09% |
| 4th | 01/10/2025 – 31/12/2025 | 09% |
FAQs Related To IRS Interest Rates Q4 2025
- What is the IRS Interest Rate Q4 2025?
- The IRS Interest Rate Q4 2025 is the set of interest rates that the IRS applies to underpayments and overpayments of taxes from 1st Oct, 2025 to 31 Dec, 2025.
- Has the IRS adjusted the rate of interest for the last Quarter?
- No, the IRS has not adjusted the rate of interest for the last quarter.
- Do personal income taxpayers and corporations have the same rate of interest for 2025?
- No, personal income taxpayers and corporations have different overpayment taxes and underpayment taxes interest rates for 2025.
- What is considered a large corporate overpayment and what’s the interest rate?
- A large corporate overpayment means when a corporation overpaid the taxes over $10,000 and its interest rate is 4.5% per annum.
- Where can US residents check the official IRS Interest Rates 2025?
- US residents can check the official IRS Interest Rates 2025 via the official irs.gov portal.
