How Can I Obtain the Latest IRS Interest Rates and Update the Interest Table?

[version date: May 1, 1999]

Background

The OPM Computation of Interest on Back Pay System is based on Federal law and regulations. By law, the applicable interest rate is the "overpayment rate" adjusted quarterly by the Secretary of the Treasury and published in an Internal Revenue Service (IRS) Bulletin issued before the beginning of each quarter.

Web Site

OPM maintains a web page that contains the latest IRS quarterly interest rate used in computing back pay interest. If you are connected to the Internet, you can obtain the rates at this link.

Updating the Interest Rate Table in the OPM Back Pay Interest System

• From the Start menu, select Programs, then OPM Back Pay Interest System.
• From the Main Menu, click on the Update Interest Rate button.
• The Interest Rate screen will display the earliest quarterly effective date (i.e., January 1, April 1, July 1, or October 1) for which an interest rate has not been entered (i.e., the earliest quarterly date showing a zero rate). If you have not used the program for more than 3 months, you may have to update more than one quarterly interest rate.
• To Add a new interest rate, move the cursor to the interest rate field and enter the appropriate annual interest rate (in place of the zero). Enter the annual interest rate expressed as a whole number. For example, type "7" if the annual interest rate is 7%. The rate is added to the interest rate table immediately when typed, without the need to click on any other button.
• You can move to another record (i.e., quarterly effective date), by clicking on the arrows on the bar below the interest rate field. Clicking on the |< arrow takes you to the first record (10/1/87). Clicking on the >| arrow takes you to the last record (10/1/2025 by default). Clicking on the < and > arrows moves you one record at a time in the desired direction.
• The program knows which years are leap years and will display a check-mark to denote a leap year. It is not necessary for you to enter that information.
• The Grid button will allow you to view the entire interest table. You may move up or down by using the Page Up or Page Down keys, by using the arrow keys on your keyboard, or by using the vertical slide bar with your mouse. (This Grid is for viewing purposes only. You cannot make changes in the Grid mode.)
• Close the Interest Rate screen by clicking on the 'X' in the upper right hand corner of the screen.
• You will be returned to the Main Menu where you can continue using the program or click on Exit to close the program.