IRS Interest Rates Remain Unchanged for Third Quarter of 2025

The Internal Revenue Service has announced that interest rates will remain steady from July 1st onward.

According to the tax agency, the rates for overpayments and underpayments will stay at 7% for individuals.

Here are some additional interest rates:

• 4.5% on certain overpayments for businesses that exceed $10,000
• 9% for shortages attributed to larger companies

The IRS sets these rates quarterly. For taxes that are unpaid, interest will apply starting from the date the taxes are fully paid, which includes any fines or penalties.

If a taxpayer doesn’t receive a refund within 45 days, the IRS may start accruing interest from the filing deadline for those taxes.

For individual taxpayers, the tax rate is 3 percentage points above the federal short-term rate. For businesses, the underpayment rate is also based on the short-term rate plus 3 points, and the overpayment rate is the federal short-term rate plus 2 points.

In cases of large business shortages, the rate is the federal shortage rate plus an additional 5 points. For overpayments that exceed $10,000, the applicable rate includes the federal short-term tax rate plus an additional 1.5 points.

These interest rates are derived from the federal short-term rates that were set in April 2025.