Interest

Interest accrues on any late payment of tax from the original due date of the tax, not including any extension, to the date the tax is paid. An extension of the time to file a return does not similarly extend the time to pay the tax. Interest accrues on any tax balance reported on, but not paid with, a filed return. Interest also accrues on any additional tax assessed as the result or an audit or the filing of an amended return.

The rate of interest accrual depends on the calendar year(s) over which the deficiency continues. Additionally, a discounted rate is allowed if:

the taxpayer pays the tax in full prior to the issuance of a notice of deficiency;

the taxpayer pays the tax in full within 30 days of the issuance of a notice of deficiency; or

within 30 days of the issuance of a notice of deficiency, the taxpayer enters into an agreement to pay the tax in monthly installments.

The discounted and non-discounted, regular interest rates for recent years are listed in the following table.

Calendar year Discounted rate Regular rate 2022 3% 6% 2023 5% 8% 2024 8% 11% 2025 9% 12% 2026 8% 11%