How Is Interest Calculated on Your IEEPA Refund?

TL;DR – Your IEEPA refund includes interest under 19 U.S.C. § 1505. Interest accrues from the date you paid the duties and is calculated using the IRS Federal short-term rate plus a fixed markup – 6% for corporations, 7% for non-corporate entities in Q1 2026. You don't need to request it separately. CBP calculates and includes it automatically.

Yes, Your Refund Includes Interest

Under 19 U.S.C. § 1505, CBP is required to pay interest on customs duty refunds. This applies to the IEEPA refunds processed through CAPE – you don't need to add a separate line to your Declaration or make any special request. CBP calculates the interest and includes it in your refund payment automatically.

Interest accrues from the date the duties were originally paid. Since IEEPA duties were collected starting February 2025, entries from that period will carry more than a year of interest by the time refunds are processed in mid-to-late 2026.

The Interest Rate

The rate is set by statute under IRC § 6621 and tied to the IRS Federal short-term rate, adjusted quarterly. The formula:

Corporations: Federal short-term rate + 2 percentage points
Non-corporate entities (individuals, partnerships, S-corps): Federal short-term rate + 3 percentage points

For Q1 2026 (January–March 2026), IRS Revenue Ruling 25-22 set the applicable rates at:

6% for corporations
7% for non-corporate entities

These rates change every quarter based on the prevailing IRS short-term rate. The rate that applies to each quarter of the IEEPA period is the rate in effect during that quarter – so a duty paid in February 2025 accrues interest at the Q1 2025 rate for that quarter, then Q2 2025 for the next quarter, and so on through the date of refund.

If you're doing a precise calculation, you'll need the quarterly rates for the full IEEPA period (Q1 2025 through Q2 2026). These are published in IRS Revenue Rulings each quarter and available at IRS.gov.

How to Estimate Your Interest

For a rough estimate, you can use a single average rate applied to the full period. The rates during the IEEPA period were in the 5–7% range depending on quarter and entity type.

Simple example:

A corporation paid $10,000 in IEEPA duties in April 2025. Refund processes in July 2026 – approximately 15 months later.

Using a 6% annual rate: $10,000 × 6% × (15/12) = $750 in interest

Total refund: $10,750

The actual calculation is slightly more complex because CBP applies each quarter's specific rate to its quarter rather than one blended rate across the whole period. But for ballpark purposes, 6% annualized on the duty amount times the number of months is a reasonable approximation for corporate filers.

For a precise calculation based on your actual ES-003 data and entry dates, use a tool that handles the quarterly rate changes automatically.

Frequently Asked Questions

Do I need to request interest separately? No. Interest is calculated and paid automatically by CBP under 19 U.S.C. § 1505. Your CAPE Declaration does not include a separate interest request – CBP computes it when processing your refund.

What if my entries span multiple quarters? Each entry accrues interest from its specific payment date. Entries from February 2025 accrue more interest than entries from December 2025. The rate applied each quarter is the IRS quarterly rate for that period, not a single rate for the whole term.

Is the interest taxable income? Yes. Interest received on a customs refund is treated as ordinary income for US federal tax purposes. Include it as income in the year you receive the payment. Consult your accountant for specifics – the interest portion will likely appear separately from the duty refund on any CBP documentation.

When does interest stop accruing? Interest accrues until CBP issues the refund. The specific end date is the date CBP processes the reliquidation and generates the payment – not when the money arrives in your bank account. In practice, the difference is days, not weeks.