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✓ Rules verified 2 September 2026 · page reviewed September 2026

IRS Interest Calculator

IRS interest is not a flat annual charge. The rate is reset every quarter, it compounds daily, and each quarter's rate applies only to its own days. This calculator runs the balance day by day through every rate period between the due date and the date you choose, and shows the rate and revenue ruling behind each segment.

The short answer: The IRS charges interest on unpaid tax at the federal short-term rate plus three percentage points, reset every quarter and compounded daily. Interest runs from the original due date until the balance is paid, even if you had an extension to file.

By the QuickTaxTools Editorial Team · Reviewed September 1, 2026 against IRS Rev. Proc. 2025-32 (2026) and Rev. Proc. 2024-40 as amended by OBBBA (2025)

Taxpayer & return

The large-corporate rate (federal short-term rate plus 5) applies only after the IRC 6621(c) trigger: more than $100,000 unpaid 30 days after a 30-day letter, 90-day letter or notice and demand.

This page computes IRS interest (Internal Revenue Service).

Looking for the other jurisdiction? Open Illinois interest.

This calculator provides an estimate based on the information entered and the official rules cited. Actual IRS or Illinois Department of Revenue assessments may differ because of payment application, notices, relief provisions, prior account activity, amended liabilities, or facts not entered. This tool is educational and is not legal or tax advice.

How the IRS figures interest

Under IRC 6621 the underpayment rate is the federal short-term rate plus three percentage points, set each calendar quarter and published in a revenue ruling about six weeks before the quarter begins. Under IRC 6622 the interest compounds daily: each day's interest is added to the balance and earns interest itself from the next day. Over a year that daily compounding adds about a quarter of a percentage point to a 7% rate. The divisor is the number of days in that calendar year, so 2024's interest was figured over 366 days and 2025's over 365.

Why "today's rate" is the wrong shortcut

A balance that has been open since 2021 passed through 3%, 4%, 5%, 6%, 7% and 8% quarters. Applying the current rate to the whole period would overstate the early years by more than double. The calculator uses the table of published rates from the first quarter of 2019 onward and refuses to extend past the last quarter the IRS has announced; if your payoff date lands in a quarter with no published rate yet, it says so rather than guessing.

Three rates, not one

Individuals, estates, trusts, partnerships and S corporations pay the standard underpayment rate. C corporations pay the corporate rate, which has matched it in every recent quarter. A corporation with more than $100,000 of tax unpaid 30 days after a 30-day letter, 90-day letter or notice and demand pays the large corporate underpayment rate (the short-term rate plus five) from that date on. The calculator applies the higher rate only when you enter the date it began; it never assumes the trigger from the size of the balance.

Payments and the running balance

Each payment reduces the balance from its own date, and interest keeps compounding on what is left. The results page lists every segment: its dates, day count, divisor, rate, the balance it was charged on, the interest it added and the Internal Revenue Bulletin the rate came from, so the number can be checked against the IRS notice line by line.

Please read: This calculator provides an estimate based on the information entered and the official rules cited. Actual IRS assessments may differ because of payment application, notices, relief provisions, prior account activity, amended liabilities, or facts not entered. This tool is educational and is not legal or tax advice.

Official sources used on this page

Every rule record names its source, revision and the date it was last verified; the results panel prints the ones your calculation used. Rules last verified 2 September 2026.

Frequently Asked Questions

When does IRS interest start and stop?

It starts on the due date of the tax (the first day charged is the day after) and runs until the balance is paid in full, including any penalties it is charged on.

Does interest apply to penalties too?

Yes. The failure-to-file penalty bears interest from the return due date, including any extension; the failure-to-pay penalty from the date of the notice assessing it. The late-filing calculator on this site handles both; this page computes interest on a single balance.

Is the corporate rate different from the individual rate?

The corporate underpayment rate has equalled the individual rate in every quarter since 2019. The large corporate underpayment rate is two points higher and applies only after the IRC 6621(c) trigger.

Why does my number differ slightly from the IRS notice?

The IRS applies payments to tax, then penalty, then interest, and computes to the day the notice is issued. Enter the notice date as the compute-through date and each payment on its posted date to get closest.

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