Underpayment and Overpayment Rates

Interest can be calculated using either the Underpayment or Overpayment rates for Federal and Domestic States. Underpayment rates are typically higher than overpayment rates.

Underpayment Rates (Default)

To calculate interest using the underpayment rates, enter the Interest Start and End Dates and click Calculate Interest & Penalties.

Overpayment Rates

To calculate interest using the overpayment rates, enter the Interest Start and End Dates, select the check box Use Overpayment, and click Calculate Interest & Penalties.

Interest and Penalties Calculation Support Schedule

This schedule shows the incorrect signs for the calculated interest amount if:

•	You use the Underpayment rate and your Interest Calc On amount is negative.

•	You use the Overpayment rate and your Interest Calc On amount is positive.

Note: This occurs because in these two scenarios, the interest amount TimeValue TaxInterest generates is the opposite sign of what the interest amount needs to be in the Uncertain Tax Positions Application.