Internal Revenue Code · 26 U.S.C.
§ 6621. Determination of rate of interest
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 6621
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- January 3, 1975 by Pub. L. 93–625
- Last amended
- July 1, 2019 by Pub. L. 116–25
- Amendments
- 14 dated changes in the source credit
- Length
- 4 subsections · 948 words · about 4 min to read
- Defines
- 2 terms
- Cross-references
- cites 4; cited by 31 Code sections and 32 other regulations
- Regulations
- 3 issued under this section
The Secretary shall determine the Federal short-term rate for the first month in each calendar quarter.
Except as provided in subparagraph (B), the Federal short-term rate determined under paragraph (1) for any month shall apply during the first calendar quarter beginning after such month.
In determining the addition to tax under section 6654 for failure to pay estimated tax for any taxable year, the Federal short-term rate which applies during the 3rd month following such taxable year shall also apply during the first 15 days of the 4th month following such taxable year.
The Federal short-term rate for any month shall be the Federal short-term rate determined during such month by the Secretary in accordance with section 1274(d). Any such rate shall be rounded to the nearest full percent (or, if a multiple of ½ of 1 percent, such rate shall be increased to the next highest full percent).
For purposes of determining the amount of interest payable under section 6601 on any large corporate underpayment for periods after the applicable date, paragraph (2) of subsection (a) shall be applied by substituting “5 percentage points” for “3 percentage points”.
In the case of any underpayment of any tax imposed by this title to which the deficiency procedures do not apply, subparagraph (A) shall be applied by taking into account any letter or notice provided by the Secretary which notifies the taxpayer of the assessment or proposed assessment of the tax.
For purposes of subparagraph (A), a letter or notice shall be disregarded if, during the 30-day period beginning on the day on which it was sent, the taxpayer makes a payment equal to the amount shown as due in such letter or notice, as the case may be.
For purposes of this paragraph, any letter or notice shall be disregarded if the amount of the deficiency or proposed deficiency (or the assessment or proposed assessment) set forth in such letter or notice is not greater than $100,000 (determined by not taking into account any interest, penalties, or additions to tax).
The term “large corporate underpayment” means any underpayment of a tax by a C corporation for any taxable period if the amount of such underpayment for such period exceeds $100,000.
To the extent that, for any period, interest is payable under subchapter A and allowable under subchapter B on equivalent underpayments and overpayments by the same taxpayer of tax imposed by this title, the net rate of interest under this section on such amounts shall be zero for such period.
(Added Pub. L. 93–625, § 7(a)(1), Jan. 3, 1975, 88 Stat. 2114; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–167, § 4(b), Dec. 29, 1979, 93 Stat. 1275; Pub. L. 97–34, title VII, § 711(a)–(c), Aug. 13, 1981, 95 Stat. 340; Pub. L. 97–248, title III, § 345(a), Sept. 3, 1982, 96 Stat. 636; Pub. L. 98–369, div. A, title I, § 144(a), July 18, 1984, 98 Stat. 682; Pub. L. 99–514, title XV, §§ 1511(a), (c)(1), 1535(a), Oct. 22, 1986, 100 Stat. 2744, 2750; Pub. L. 100–647, title I, § 1015(d), Nov. 10, 1988, 102 Stat. 3569; Pub. L. 101–239, title VII, § 7721(b), Dec. 19, 1989, 103 Stat. 2399; Pub. L. 101–508, title XI, § 11341(a), Nov. 5, 1990, 104 Stat. 1388–470; Pub. L. 103–465, title VII, § 713(a), Dec. 8, 1994, 108 Stat. 5001; Pub. L. 104–188, title I, § 1702(c)(6), (7), Aug. 20, 1996, 110 Stat. 1870; Pub. L. 105–34, title XIV, § 1463(a), title XVI, § 1604(b)(1), Aug. 5, 1997, 111 Stat. 1057, 1097; Pub. L. 105–206, title III, §§ 3301(a), 3302(a), July 22, 1998, 112 Stat. 741; Pub. L. 116–25, title I, § 1001(b)(1)(E), July 1, 2019, 133 Stat. 985.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 6621
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 4 other sections
- § 6654 Failure by individual to pay estimated income tax
- § 1274(d) Determination of issue price in the case of certain debt instruments issued for property
- § 6601 Interest on underpayment, nonpayment, or extensions of time for payment, of tax
- § 6212 Notice of deficiency
Cited by 31 Code sections
- § 42(j)(2)(B) Low-income housing credit
- § 45(b)(7)(B)(i)(I)(bb) Electricity produced from certain renewable resources, etc.
- § 45D(g)(2)(B) New markets tax credit
- § 148(f)(4)(C)(x)(II) Arbitrage
- § 453A(c)(2)(B) Special rules for nondealers
- § 457A(c)(2) Nonqualified deferred compensation from certain tax indifferent parties
- § 460(b)(7)(A) Special rules for long-term contracts
- § 512(b)(19)(I) Unrelated business taxable income
- § 664(g)(6)(B) Charitable remainder trusts
- § 668(a)(1) Interest charge on accumulation distributions from foreign trusts
- § 852(e)(3)(A) Taxation of regulated investment companies and their shareholders
- § 1258(d)(2)(B) Recharacterization of gain from certain financial transactions
- § 1291(c)(3)(A)(ii) Interest on tax deferral
- § 1400Z–2(f)(1)(B) Special rules for capital gains invested in opportunity zones
- § 5001(c)(4)(B)(ii) Imposition, rate, and attachment of tax
- § 5011(c)(2) Income tax credit for average cost of carrying excise tax
- § 5041(c)(7)(B)(ii) Imposition and rate of tax
- § 5051(a)(6)(B)(ii) Imposition and rate of tax
- § 6226(c)(2)(C) Alternative to payment of imputed underpayment by partnership
- § 6232(f)(1)(A) Assessment, collection, and payment
- § 6325(b)(4)(B) Release of lien or discharge of property
- § 6332(d)(1) Surrender of property subject to levy
- § 6343(c) Authority to release levy and return property
- § 6427(i)(3)(B) Fuels not used for taxable purposes
Show 7 more
- § 6601(a) Interest on underpayment, nonpayment, or extensions of time for payment, of tax
- § 6602 Interest on erroneous refund recoverable by suit
- § 6603(d)(4) Deposits made to suspend running of interest on potential underpayments, etc.
- § 6611(a) Interest on overpayments
- § 6654(a)(1) Failure by individual to pay estimated income tax
- § 6655(a)(1) Failure by corporation to pay estimated income tax
- § 7426(g) Civil actions by persons other than taxpayers
Cited in 32 regulations not issued under it
- § 1.45-7 Prevailing wage requirements.
- § 1.148-3 General arbitrage rebate rules.
- § 1.367(a)-3 Treatment of transfers of stock or securities to foreign corporations.
- § 1.367(a)-8 Gain recognition agreement requirements.
- § 1.444-3T Manner and time of making section 444 election (temporary).
- § 1.460-6 Look-back method.
- § 1.501(r)-6 Billing and collection.
- § 1.860-3 Interest and additions to tax.
- § 1.884-2 Special rules for termination or incorporation of a U.S. trade or business or liquidation or reorganization of a foreign corporation or its domestic subsidiary.
- § 1.884-2T Special rules for termination or incorporation of a U.S. trade or business or liquidation or reorganization of a foreign corporation or its domestic subsidiary (temporary).
- § 1.1295-3 Retroactive elections.
- § 1.1445-3 Adjustments to amount required to be withheld pursuant to withholding certificate.
- § 1.1445-6 Adjustments pursuant to withholding certificate of amount required to be withheld under section 1445(e).
- § 1.6038B-1 Reporting of certain transfers to foreign corporations.
- § 1.6654-1 Addition to the tax in the case of an individual.
- § 1.6655-1 Addition to the tax in the case of a corporation.
- § 1.6655-2 Annualized income installment method.
- § 1.6655-7 Addition to tax on account of excessive adjustment under section 6425.
- § 1.7872-15 Split-dollar loans.
- § 20.6166-1 Election of alternate extension of time for payment of estate tax where estate consists largely of interest in closely held business.
- § 20.6166A-1 Extension of time for payment of estate tax where estate consists largely of interest in closely held business.
- § 20.6324A-1 Special lien for estate tax deferred under section 6166 or 6166A.
- § 301.6226-3 Adjustments taken into account by partners.
- § 301.6325-1 Release of lien or discharge of property.
Show 8 more
- § 301.6332-1 Surrender of property subject to levy.
- § 301.6343-2 Return of wrongfully levied upon property.
- § 301.6601-1 Interest on underpayments.
- § 301.6602-1 Interest on erroneous refund recoverable by suit.
- § 301.6611-1 Interest on overpayments.
- § 301.6622-1 Interest compounded daily.
- § 301.6863-1 Stay of collection of jeopardy assessments; bond to stay collection.
- § 301.7430-7 Qualified offers.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 116–25Parts changed in 2019: (c)(2)(A)(i)
- Amended by Pub. L. 105–206Parts changed in 1998: (a)(1)(B) (d)
- Amended by Pub. L. 105–34Parts changed in 1997: (a)(1) (c)(2)(B)(iii)
- Amended by Pub. L. 104–188Parts changed in 1996: (c)(2)(A) (c)(2)(B)(i)
- Amended by Pub. L. 103–465Parts changed in 1994: (a)(1)
- Amended by Pub. L. 101–508Parts changed in 1990: (c)
- Amended by Pub. L. 101–239Parts changed in 1989: (c)
- Amended by Pub. L. 100–647Parts changed in 1988: (a)(1)(A) (b) (b)(1)
- Amended by Pub. L. 99–514Parts changed in 1986: (a) (b) (c) (c)(3)(A)(v) (d)
- Amended by Pub. L. 98–369Parts changed in 1984: (d)
- Amended by Pub. L. 97–248Parts changed in 1982: (b)
- Amended by Pub. L. 97–34Parts changed in 1981: (b) (c)
- Amended by Pub. L. 96–167Parts changed in 1979: (a)
- Amended by Pub. L. 94–455Parts changed in 1976: (a)
- Added by Pub. L. 93–625
Where it sits in the Code
- Subtitle F Procedure and Administration
- Chapter 67 INTEREST
- Subchapter C Determination of Interest Rate; Compounding of Interest
Nearby sections
- § 6621 Determination of rate of interest
- § 6622 Interest compounded daily
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2019—Subsec. (c)(2)(A)(i). Pub. L. 116–25 substituted “Internal Revenue Service Independent Office of Appeals” for “Internal Revenue Service Office of Appeals”.
1998—Subsec. (a)(1)(B). Pub. L. 105–206, § 3302(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “2 percentage points.”
Subsec. (d). Pub. L. 105–206, § 3301(a), added subsec. (d).
1997—Subsec. (a)(1). Pub. L. 105–34, § 1604(b)(1), substituted “subsection (c)(3), applied by substituting ‘overpayment’ for ‘underpayment’)” for “subsection (c)(3))” in concluding provisions.
Subsec. (c)(2)(B)(iii). Pub. L. 105–34, § 1463(a), added cl. (iii).
1996—Subsec. (c)(2)(A). Pub. L. 104–188, § 1702(c)(6), inserted closing provisions “The preceding sentence shall be applied without regard to any such letter or notice which is withdrawn by the Secretary.”
Subsec. (c)(2)(B)(i). Pub. L. 104–188, § 1702(c)(7), substituted “this title” for “this subtitle”.
1994—Subsec. (a)(1). Pub. L. 103–465 inserted concluding provisions.
1990—Subsec. (c). Pub. L. 101–508 added subsec. (c).
1989—Subsec. (c). Pub. L. 101–239 repealed subsec. (c) which related to attribution of interest on substantial underpayments to tax motivated transactions.
1988—Subsec. (a)(1)(A), (2)(A). Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”.
Subsec. (b). Pub. L. 100–647, § 1015(d)(2), substituted “Federal short-term” for “short-term Federal” in heading.
Subsec. (b)(1). Pub. L. 100–647, § 1015(d)(1), substituted “Federal short-term” for “short-term Federal”.
1986—Subsec. (a). Pub. L. 99–514, § 1511(a), added subsec. (a) and struck out former subsec. (a) which read as follows: “The annual rate established under this section shall be such adjusted rate as is established by the Secretary under subsection (b).”
Subsec. (b). Pub. L. 99–514, § 1511(a), added subsec. (b) relating to determination of Federal short-term rate and struck out former subsec. (b) which related to interest rate adjustments and establishment of adjusted rates.
Subsec. (c). Pub. L. 99–514, § 1511(a), (c)(1), redesignated subsec. (d) as (c), in par. (1), struck out “annual” before “rate of interest” and substituted “the underpayment rate established under this section” for “the adjusted rate established under subsection (b)”, and struck out former subsec. (c) definition of prime rate, which read as follows: “For purposes of subsection (b), the term ‘adjusted prime rate charged by banks’ means the average predominant prime rate quoted by commercial banks to large businesses, as determined by the Board of Governors of the Federal Reserve System.”
Subsec. (c)(3)(A)(v). Pub. L. 99–514, § 1535(a), added cl. (v).
Subsec. (d). Pub. L. 99–514, § 1511(c)(1)(A), redesignated subsec. (d) as (c).
1984—Subsec. (d). Pub. L. 98–369 added subsec. (d).
1982—Subsec. (b). Pub. L. 97–248 substituted provisions that if the adjusted prime rate charged by banks (rounded to the nearest full percent) during the 6-month period ending on September 30 of any calendar year, or during the 6-month period ending on March 31 of any calendar year, differs from the interest rate in effect under this section on either such date, respectively, then the Secretary shall establish, within 15 days after the close of the applicable 6-month period, an adjusted rate of interest equal to such adjusted prime rate, and that any adjusted rate of interest established under paragraph (1) shall become effective on January 1 of the succeeding year in the case of an adjustment attributable to paragraph (1)(A), and on July 1 of the same year in the case of an adjustment attributable to paragraph (1)(B), for provisions that the Secretary was to establish an adjusted rate of interest for the purpose of subsection (a) not later than October 15 of any year if the adjusted prime rate charged by banks during September of that year, rounded to the nearest full percent, was at least a full percentage point more or less than the interest rate which was then in effect, and that any such adjusted rate of interest would be equal to the adjusted prime rate charged by banks, rounded to the nearest full percent, and would become effective on January 1 of the immediately succeeding year.
1981—Subsec. (b). Pub. L. 97–34, § 711(a), struck out provision that an adjustment provided for under this subsection not be made prior to the expiration of 23 months following the date of any preceding adjustment under this subsection which changes the rate of interest.
Pub. L. 97–34, § 711(c), substituted “January 1” for “February 1”.
Subsec. (c). Pub. L. 97–34, § 711(b), struck out “90 percent of” before “the average predominant prime rate”.
1979—Subsec. (a). Pub. L. 96–167 substituted provisions setting the annual rate established under this section to be such adjusted rate as is established by the Secretary under subsec. (b) of this section for provision that the rate of interest under sections 6601(a), 6602, 6611(a), 6332(c)(1), and 7426(g) of this title, and under section 2411(a) of title 28 was to be 9 percent per annum, or such adjusted rate as was established by the Secretary under subsection (b).
1976—Subsecs. (a), (b). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by section 3301(a) of Pub. L. 105–206 applicable to interest for periods beginning after July 22, 1998, and, subject to applicable statutes of limitation, to interest for periods beginning before July 22, 1998, if taxpayer reasonably identifies and establishes periods of overpayments and underpayments for which zero rate applies, and not later than Dec. 31, 1999, requests application of subsec. (d) of this section to such periods, see section 3301(c) of Pub. L. 105–206, set out as a note under section 6601 of this title.
Pub. L. 105–206, title III, § 3302(b), July 22, 1998, 112 Stat. 742, provided that: “The amendment made by this section [amending this section] shall apply to interest for the second and succeeding calendar quarters beginning after the date of the enactment of this Act [July 22, 1998].”
Effective Date of 1997 Amendment
Pub. L. 105–34, title XIV, § 1463(b), Aug. 5, 1997, 111 Stat. 1058, provided that: “The amendment made by subsection (a) [amending this section] shall apply for purposes of determining interest for periods after December 31, 1997.”
Amendment by section 1604(b)(1) of Pub. L. 105–34 effective as if included in the sections of the Uruguay Round Agreements Act, Pub. L. 103–465, to which it relates, see section 1604(b)(4) of Pub. L. 105–34, set out as a note under section 412 of this title.
Effective Date of 1996 Amendment
Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.
Effective Date of 1994 Amendment
Pub. L. 103–465, title VII, § 713(b), Dec. 8, 1994, 108 Stat. 5002, provided that: “The amendment made by this section [amending this section] shall apply for purposes of determining interest for periods after December 31, 1994.”
Effective Date of 1990 Amendment
Pub. L. 101–508, title XI, § 11341(b), Nov. 5, 1990, 104 Stat. 1388–471, provided that: “The amendment made by subsection (a) [amending this section] shall apply for purposes of determining interest for periods after December 31, 1990.”
Effective Date of 1989 Amendment
Amendment by Pub. L. 101–239 applicable to returns the due date for which (determined without regard to extensions) is after Dec. 31, 1989, see section 7721(d) of Pub. L. 101–239, set out as a note under section 461 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date of 1986 Amendment
Amendment by section 1511(a), (c)(1) of Pub. L. 99–514 applicable for purposes of determining interest for periods after Dec. 31, 1986, see section 1511(d) of Pub. L. 99–514, set out as a note under section 47 of this title.
Pub. L. 99–514, title XV, § 1535(b), Oct. 22, 1986, 100 Stat. 2750, provided that: “The amendment made by subsection (a) [amending this section] shall apply to interest accruing after December 31, 1984; except that such amendment shall not apply in the case of any underpayment with respect to which there was a final court decision before the date of the enactment of this Act [Oct. 22, 1986].”
Effective Date of 1984 Amendment
Pub. L. 98–369, div. A, title I, § 144(c), July 18, 1984, 98 Stat. 684, provided that: “The amendments made by this section [amending this section and section 6214 of this title] shall apply with respect to interest accruing after December 31, 1984.”
Effective Date of 1982 Amendment
Pub. L. 97–248, title III, § 345(b), Sept. 3, 1982, 96 Stat. 636, as amended by Pub. L. 98–369, div. A, title VII, § 714(m), July 18, 1984, 98 Stat. 963, provided that: “The amendment made by this section [amending this section] shall apply to adjustments taking effect on or after January 1, 1983.”
Effective Date of 1981 Amendment
Pub. L. 97–34, title VII, § 711(d), Aug. 13, 1981, 95 Stat. 340, provided that:
“(1) For subsections (a) and (b).— The amendments made by subsections (a) and (b) [amending this section] shall apply to adjustments made after the date of the enactment of this Act [Aug. 13, 1981].“(2) For subsection (c).— The amendment made by subsection (c) [amending this section] shall apply to adjustments made for periods after 1982.”
Effective Date of 1979 Amendment
Pub. L. 96–167, § 4(c)(2), Dec. 29, 1979, 93 Stat. 1276, provided that: “The amendment made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [Dec. 29, 1979].”
Effective Date
Pub. L. 93–625, § 7(e), Jan. 3, 1975, 88 Stat. 2116, provided that: “The amendments made by this section [enacting this section and amending sections 514, 6163, 6166, 6167, 6332, 6504, 6601, 6602, 6611, 6654, 6655, and 7426 of this title and section 2411 of Title 28, Judiciary and Judicial Procedure] shall take effect on July 1, 1975, and apply to amounts outstanding on such date or arising thereafter.”
Regulations
Pub. L. 99–514, title XV, § 1511(b), Oct. 22, 1986, 100 Stat. 2744, provided that: “The Secretary of the Treasury or his delegate may issue regulations to coordinate section 6621 of the Internal Revenue Code of 1954 [now 1986] (as amended by this section) with section 6601(f) of such Code. Such regulations shall not apply to any period after the date 3 years after the date of the enactment of this Act [Oct. 22, 1986].”