Prescribed Interest Rates

CRA and IRS Interest Rates For Small Business

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by L. Kenway BComm CPB Retired

Published November 2014  |  Edited July 18, 2024

WHAT'S IN THIS ARTICLE
CRA Prescribed Interest Rates | PLOI Rates | AFR | IRS Over Payment Rates | IRS Under Payment Rates

BOOKKEEPER'S HANDY REFERENCE

The Bookkeeper's Handy Reference to IRS interest rates for loans to shareholders, installment sales, and underpayment or overpayment of taxes; and CRA prescribed interest rates for shareholder loans, spousal loans as well as employee loans.

Highlights Of This Post




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Canadian (CRA) Prescribed Interest Rates

Released Quarterly

These are the rates used for amounts owed to CRA. These are also the rates CRA pays when they owe you or your corporation.

Taxable Benefits refers to interest-free and low-interest loans for shareholders, spousal and employees.

Overdue and ovepaid taxes includes income taxes, CPP contributions, EI premiums, GST/HST, Excise tax / duties ... basically any kind of federal tax.

Period Overdue Taxes Overpaid Taxes Taxable Benefits
Jul 1 2024 to
Sep 30 2024		 9% 5% corporate
7% others		 5%
Jan 1 2024 to
Jun 30 2024		 10% 6% corporate
8% others		 6%
Apr 1 2023 to
Dec 31 2023		 9% 5% corporate
7% others		 5%
Jan 1 2023 to
Mar 31 2023		 8% 4% corporate
6% others		 4%
Oct 1 2022 to
Dec 31 2022		 7% 3% corporate
5% others		 3%
Jul 1 2022 to
Sep 30 2022		 6% 2% corporate
4% others		 2%
Jul 1 2020 to
Jun 30 2022		 5% 1% corporate
3% others		 1%
Apr 1 2018 to
Jun 30 2020		 6% 2% corporate
4% others		 2%
Jan 1 2014 to
Mar 31 2018		 5% 1% corporate
3% others		 1%
Oct 1 2013 to
Dec 31 2013		 6% 2% corporate
4% others		 2%
Jul 1 2010 to
Sep 30 2013		 5% 1% corporate
3% others		 1%
Apr 1 2009 to
Jun 30 2010		 5% 3% 1%
Jan 1-Mar 31 2009 6% 4% 2%
Jul 1-Dec 31 2008 7% 5% 3%
Jan 1-Jun 30 2008 8% 6% 4%

Prescribed Interest Rates
Corporate Taxpayer Pertinent Loans or Indebtedness

Pertinent loans or indebtedness (PLOI) rates pertain to non-arm's length nonresident transactions used for cross border debt financing.

More >> What is PLOI?

Period Corporate
Loans		 Period Corporate
Loans
Jul 1 2024 to
Sep 30 2024		 8.96% Apr 1 2024 to
Jun 30 2024		 9.04%
Jan 1 2024 to
Mar 31 2024		 9.16% Oct 1 2023 to
Dec 31 2023		 8.99%
Jul 1 2023 to
Sep 30 2023		 8.44% Apr 1 2023 to
Jun 30 2023		 8.40%
Jan 1 2023 to
Mar 31 2023		 8.00% Oct 1 2022 to
Dec 31 2022		 6.45%
Jul 1 2022 to
Sep 30 2022		 5.20% Apr 1 2022 to
Jun 30 2022		 4.38%
Jan 1 2022 to
Mar 31 2022		 4.15% Oct 1 2021 to
Dec 31 2021		 4.17%
Jul 1 2021 to
Sep 30 2021		 4.10% Apr 1 2021 to
Jun 30 2021		 4.07%
Jan 1 2021 to
Mar 31 2021		 4.10% Oct 1 2020 to
Dec 31 2020		 4.18%
Jul 1 2020 to
Sep 30 2020		 4.27% Apr 1 2020 to
Jun 30 2020		 5.65%
Jan 1 2020 to
Mar 31 2020		 5.64% Oct 1 2019 to
Dec 31 2019		 5.65%
Jul 1 2019 to
Sep 30 2019		 5.67% Apr 1 2019 to
Jun 30 2019		 5.63%
Jan 1 2019 to
Mar 31 2019		 5.67% Oct 1 2018 to
Dec 31 2018		 5.45%
Jul 1 2018 to
Sep 30 2018		 5.16% Apr 1 2018 to
Jun 30,2018		 5.18%
Jan 1 2018 to
Mar 31 2018		 4.98% Oct 1 2017 to
Dec 31 2017		 4.75%
Jul 1 2017 to
Sep 30 2017		 4.55% Apr 1 2017 to
Jun 30 2017		 4.47%
Jan 1 2017 to
Mar 31 2017		 4.50% Oct 1 2016 to
Dec 31 2016		 4.49%
Apr 1 2016 to
Jun 30 2016		 4.45% Jul 1 2016 to
Sep 30 2016		 4.50%
Oct 1 2015 to
Dec 31 2015		 4.52% Jan 1 2016 to
Mar 31 2016		 4.41%
Apr 1 2015 to
Jun 30 2015		 4.75% Jul 1 2015 to
Sep 30 2015		 4.61%
Oct 1 2014 to
Dec 31 2014		 4.94% Jan 1 2015 to
Mar 31 2015		 4.89%
Apr 1 2014 to
Jun 30 2014		 4.89% Jul 1 2014 to
Sep 30 2014		 4.93%
Oct 1 2013 to
Dec 31 2013		 5.02% Jan 1 2014 to
Mar 31 2014		 4.94%


IRS Prescribed Interest Rates

Source: IRS Newsroom: Released Quarterly - latest release May 9, 2024; Reference: Revenue Ruling-2024-11

These are the interest rates used by the IRS when assessing interest amounts. Under payment refers to overdue taxes while over payment refers to or over paid taxes.

There are three categories:

  • Taxpayers other than corporations - under and overpayment rate is the federal short-term rate plus 3% points.
  • Corporations - underpayment rate is the federal short-term rate plus 3% points and the overpayment rate is the federal short-term rate plus 2% points.
  • Large Corporations - underpayment rate is the federal short-term rate plus 5% points and the overpayment rate over $10,000 is the federal short-term rate plus 0.5% points.

Over Payment of Taxes Interest Rates

Period Non-Corporate Corporate Corporate
Over $10K
Jul 1 2024-
Sep 30 2024		 8% 7% 5%
Oct 1 2023-
Jun 30 2024		 8% 7% 5.5%
Jan 1 2023-
Sep 30 2023		 7% 6% 4.5%
Oct 1 2022-
Dec 31 2022		 6% 5% 3.5%
Jul 1 2022-
Sep 30 2022		 5% 4% 2.5%
Apr 1 2022-
Jun 30 2022		 4% 3% 1.5%
Jul 1 2020-
Sep 30 2022		 3% 2% 0.5%
Jul 1 2019-
Jun 30 2020		 5% 4% 2.5%
Jan 1 2019-
Jun 30 2019		 6% 5% 3.5%
Apr 1 2018-
Dec 31 2018		 5% 4% 2.5%
Apr 1 2016-
Mar 31 2018		 4% 3% 1.5%
Oct 1 2011-
Mar 31 2016		 3% 2% 0.5%
Apr 1-Sep 30 2011 4% 3% 1.5%
Jan 1-Mar 31 2011 3% 2% 0.5%
Jul 1-Dec 31 2010 4% 3% 1.5%

Under Payment of Taxes Interest Rates

Period Non-Corporate Corporate Large Corporate
Oct 1 2023-
Sep 30 2024		 8% 8% 10%
Jan 1-Sep 30 2023 7% 7% 9%
Oct 1-Dec 31 2022 6% 6% 8%
Jul 1-Sep 30 2022 5% 5% 7%
Apr 1-Jun 30 2022 4% 4% 6%
Jul 1 2020-
Mar 31 2022		 3% 3% 5%
Jan 1 2019-
Jun 30 2020		 5% 5% 7%
Jan 1-Jun 30 2019 6% 6% 8%
Apr 1-Dec 31 2018 5% 5% 7%
Apr 1 2016-
Mar 31 2018		 4% 4% 6%
Oct 1 2011-
Mar 31 2016		 3% 3% 5%
Apr 1-Sep 30 2011 4% 4% 6%
Jan 1-Mar 31 2011 3% 3% 5%
Apr 1-Dec 31 2010 4% 4% 6%

IRS Applicable Federal Rates (AFR)

Source: https://apps.irs.gov/app/picklist/list/federalRates.html

Released Monthly

AFRs are the IRS imputed interest rates. This small business tax information is useful as the rates are used for corporate loans to shareholders. They are also used for installment sales where a customer purchase is extended credit for more than 6 months ... and no interest rate was stated.

Short term is 3 years or less, mid-term is over 3 years up to 9 years, and long-term is over 9 years.

The rates are usually available the 3rd or 4th week of the preceding month.

Historical section 7520 interest rates for 1997 to 2023 can be found on the IRS website under Small Businesses & Self Employed> Section 7520 Interest Rates for Prior Years (www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates-for-prior-years).

The rate history below is for the month of January since 2020 to give you an idea of where rates have been over the past 5 years. This gives you an idea what you are looking for. As a comparison - prior to all our current economics woes, in 2018 rates were in the 1 3/4% to 3% range. For current year rates please see https://apps.irs.gov/app/picklist/list/federalRates.html .

 Short-Term   Annual   Semi 
 Annual 		  Quarterly   Monthly 
January 2024 5.00% 4.94% 4.91% 4.89%
January 2023 4.50% 4.45% 4.43% 4.41%
January 2022 0.44% 0.44% 0.44% 0.44%
January 2021 0.14% 0.14% 0.14% 0.14%
January 2020 1.60% 1.59% 1.59% 1.58%
 Mid-Term   Annual   Semi 
 Annual 		  Quarterly   Monthly 
January 2024 4.37% 4.32% 4.30% 4.28%
January 2023 3.85% 3.81% 3.79% 3.78%
January 2022 1.30% 1.30% 1.30% 1.30%
January 2021 0.52% 0.52% 0.52% 0.52%
January 2020 1.69% 1.68% 1.68% 1.67%
 Long-Term   Annual   Semi 
 Annual 		  Quarterly   Monthly 
January 2024 4.54% 4.49% 4.47% 4.45%
January 2023 3.84% 3.80% 3.78% 3.77%
January 2022 1.82% 1.81% 1.81% 1.80%
January 2021 1.35% 1.35% 1.35% 1.35%
January 2020 2.07% 2.06% 2.05% 2.05%



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