The IRS underpayment and overpayment interest rate for individuals rose to 7% for the quarter beginning July 1, 2026, up from 6% in Q2 2026. For corporations, the overpayment rate is 6%, or 4.5% for the portion exceeding $10,000, while the underpayment rate is 7%, or 9% for large corporate underpayments. These rates compound daily and stay in effect through September 30, 2026. The 7% underpayment rate also governs estimated-tax underpayment penalties for the quarter.
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IRS interest rate climbs to 7% for Q3 2026 underpayments and refunds
Why this matters for founders
Underpaying quarterly estimated taxes now costs 7% annualized, so recompute your Q3 estimate (due Sept 15) and top up withholding to hit a safe-harbor payment and avoid the higher penalty.
Source: Optima Tax Relief
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