Iowa Department of Revenue Interest Rate

Starting January 1, 2025, the interest rate for taxpayers with overdue payments will be:

10.0% annually

0.8% monthly

0.027397% daily

Iowa Code Section 421.7 specifies the procedures for calculating the Department’s annual and monthly interest rates. The annual rate is based on the average monthly prime rate during the preceding twelve month period (October through September). Iowa law requires that this average be rounded to the nearest whole percent and two percentage points to be added to it. The prime rate averaged 8.48 percent over the past twelve months. Rounded to the nearest whole percent, this average is 8.0 percent. Adding two percentage points results in the annual Department rate of 10.0 percent. The monthly rate is the annual rate divided by 12, rounded to the nearest one-tenth of a percentage point. The daily rate for 2025 is the annual rate divided by 365. The average monthly bank prime rate is published by the United States Federal Reserve .