The IRS announced on August 21, 2026 that interest rates will remain the same for the calendar quarter beginning October 1, 2026. For individuals, the rate for both overpayments and underpayments stays at 7% per year, compounded daily. The rates were computed from the federal short-term rate determined during July 2026 and are set out in Revenue Ruling 2026-15, which will appear in Internal Revenue Bulletin 2026-36, dated August 31, 2026.

The Q4 2026 rates

How the rates are built

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 3 percentage points.

For a corporation, the underpayment rate is generally the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.

Where this lands in a firm's workflow

Nothing changes, and that is the useful part. A quarter with no rate move means the estimate models, penalty projections, and client-facing interest calculations a firm built for Q3 carry into Q4 without a rebuild.

Two items still deserve a look heading into the extension season:

• Underpayment interest at 7%, compounded daily, is not a rounding error. For clients carrying a balance into the fourth quarter, the arithmetic on paying now versus at filing is worth running rather than assuming.

• The corporate spread is wide. A corporate client sitting on a large overpayment earns 6%, dropping to 4.5% on the portion above $10,000, while a large corporate underpayment costs 9%. That gap is the planning conversation, not the rate itself.

The rates apply to the quarter beginning October 1, 2026. Revenue Ruling 2026-15 is the citable source for any client memo or engagement file.