Late Payroll-Tax Deposits Cost More as IRS Interest Rate Rises to 7%
Late payroll-tax deposits will be more expensive, effective July 1.
The IRS set the interest rate on tax underpayments at 7% for Q3, up from 6% in Q2. The 7% rate applies to underpayments and overpayments for individuals and to corporate underpayments; the corporate overpayment rate is 6%.
The Service sets these rates quarterly by adding three percentage points to the federal short-term rate.
For payroll, the rate is the price of a missed or short federal tax deposit: Interest accrues on top of any failure-to-deposit penalty until the balance is paid. Confirm deposit schedules and funding cutoffs are tight heading into the third quarter.
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