08/30/2026
The IRS has confirmed that interest on unpaid individual tax balances will stay at 7% for the fourth quarter of 2026. That may sound like it changes little, but this rate compounds daily, so a balance that sits unresolved keeps growing quietly in the background, adding to whatever penalties already apply.
Per IR-2026-98, the 7% rate applies to individual underpayments starting October 1, 2026. It's set quarterly based on the federal short-term rate plus 3 points, and it stacks on top of separate failure to file and failure to pay penalties, which can add several percentage points a month. The longer a balance goes unaddressed, the more the total owed can climb, even without new penalties being assessed.
What is still unclear is how long the IRS will hold rates steady before the next adjustment, and how that timing interacts with any payment plan or resolution you may be considering. Anyone carrying a balance should know their current payoff total and how it is trending, since taxpayers in this position could be eligible for different resolution options depending on their circumstances.
Read more: https://clearstarttax.com/irs-interest-rates-unchanged-q4-2026/