Updated October 25, 2026. Quick answer: The IRS has not yet published the applicable federal rates for December 2026. The most recent ruling, Rev. Rul. 2026-21, sets November 2026 at 4.67% short-term, 5.08% mid-term and 5.52% long-term, annual compounding. The IRS determines each month’s rates during the month before it, so this page carries the November figures until the December ruling appears. As of October 16, 2026 no December rate exists.
How the IRS sets next month’s rate
Section 1274(d)(1)(B) has the Secretary determine the short-term, mid-term and long-term rates during one calendar month for the next: each is the “rate which shall apply during the following calendar month”. That is why a month’s rate is public before the month begins, and why December 2026 is not out until the IRS issues its ruling during the month before it. For each of the eleven 2026 rate months published so far, the IRS’s copy of the ruling is dated between the 15th and the 21st of the month before the rate month, shown below as the IRS server reports it.
| Rate month | Revenue ruling | Date on the IRS’s copy of the ruling file |
|---|---|---|
| January 2026 | 2026-2 | December 15, 2025 |
| February 2026 | 2026-3 | January 15, 2026 |
| March 2026 | 2026-6 | February 17, 2026 |
| April 2026 | 2026-7 | March 16, 2026 |
| May 2026 | 2026-9 | April 16, 2026 |
| June 2026 | 2026-11 | May 15, 2026 |
| July 2026 | 2026-12 | June 15, 2026 |
| August 2026 | 2026-13 | July 15, 2026 |
| September 2026 | 2026-17 | August 21, 2026 |
| October 2026 | 2026-19 | September 18, 2026 |
| November 2026 | 2026-21 | October 16, 2026 |
The prior month’s rates: October 2026
The October ruling is Rev. Rul. 2026-19, which sets October 2026 at 4.25% short-term, 4.61% mid-term and 5.22% long-term, annual compounding. Table 1 in full, every tier and every compounding column, as printed:
| Tier | Rate | Annual | Semiannual | Quarterly | Monthly |
|---|---|---|---|---|---|
| Short-term | AFR | 4.25% | 4.21% | 4.19% | 4.17% |
| Short-term | 110% AFR | 4.68% | 4.63% | 4.60% | 4.59% |
| Short-term | 120% AFR | 5.11% | 5.05% | 5.02% | 5.00% |
| Short-term | 130% AFR | 5.54% | 5.47% | 5.43% | 5.41% |
| Mid-term | AFR | 4.61% | 4.56% | 4.53% | 4.52% |
| Mid-term | 110% AFR | 5.08% | 5.02% | 4.99% | 4.97% |
| Mid-term | 120% AFR | 5.54% | 5.47% | 5.43% | 5.41% |
| Mid-term | 130% AFR | 6.02% | 5.93% | 5.89% | 5.86% |
| Mid-term | 150% AFR | 6.96% | 6.84% | 6.78% | 6.74% |
| Mid-term | 175% AFR | 8.14% | 7.98% | 7.90% | 7.85% |
| Long-term | AFR | 5.22% | 5.15% | 5.12% | 5.10% |
| Long-term | 110% AFR | 5.75% | 5.67% | 5.63% | 5.60% |
| Long-term | 120% AFR | 6.28% | 6.18% | 6.13% | 6.10% |
| Long-term | 130% AFR | 6.81% | 6.70% | 6.64% | 6.61% |
The same ruling’s Table 5 carries the section 7520 rate for October 2026, 5.6%, which the IRS sets from the 120% mid-term rate of 5.54%. It is a separate figure from the three AFR tiers; the series is on the 7520 rate page.
Where December fits in the three-month look-back for a sale
For a sale or exchange, section 1274(d)(2) uses “the lowest of the applicable Federal rates in effect for any month in the 3-calendar-month period ending with the 1st calendar month in which there is a binding contract in writing for such sale or exchange”. For a binding written contract in December 2026 the window is October 2026, November 2026 and December 2026. Annual rates, as published so far (November 2026 is Rev. Rul. 2026-21):
| Month | Short-term | Mid-term | Long-term |
|---|---|---|---|
| October 2026 | 4.25% | 4.61% | 5.22% |
| November 2026 | 4.67% | 5.08% | 5.52% |
| December 2026 | not yet published | not yet published | not yet published |
| Lowest of the published months | 4.25% (October) | 4.61% (October) | 5.22% (October) |
The row of published months is read from the rulings listed under Sources. When the missing month is published its row replaces the placeholder, and the lowest-rate row can only stay the same or fall.
Which tier a loan uses
The applicable federal rate comes from section 1274(d) and depends on the term of the debt instrument. Section 1274(d)(1)(A) sets the tier: “Not over 3 years” takes the short-term rate, “Over 3 years but not over 9 years” the mid-term rate and “Over 9 years” the long-term rate. The loan mechanics, including the dollar exceptions, are on the family loan minimum interest rate page, and the calculator turns a rate into dollars.
Common mistakes
- Treating this page’s November figures as the December rate. They are not, and no December rate is published yet.
- Using a month’s rate for a loan made in a different month without checking the look-back rule that applies to it.
- Reading the section 7520 rate as an AFR tier. It is a separate figure in the same ruling.
- Taking the annual column when a document calls for semiannual compounding. Each ruling prints all four columns.
Related: October 2026 AFR rates, the 2026 AFR table, AFR rates by month, and the family loan minimum interest rate.
The term you choose is the term the document has to state
Which of the three rates applies depends on the maturity, and a demand loan is re-tested every year while a fixed term is settled on the day you sign. That choice only exists on paper: the document is what fixes the term, the rate and the repayment schedule that the section 1274(d) tiers are read against. LawDepot builds a state-specific loan agreement.
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Sources
- Rev. Rul. 2026-21, Table 1 and Table 5 (November 2026): https://www.irs.gov/pub/irs-drop/rr-26-21.pdf
- Rev. Rul. 2026-19, Table 1 and Table 5 (October 2026, earlier rate): https://www.irs.gov/pub/irs-drop/rr-26-19.pdf
- Rev. Rul. 2026-17, Table 1 and Table 5 (September 2026): https://www.irs.gov/pub/irs-drop/rr-26-17.pdf
- 26 U.S.C. 1274, determination of issue price in the case of certain debt instruments (GovInfo): https://www.govinfo.gov/link/uscode/26/1274
- IRS, Section 7520 interest rates: https://www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates
Sources: the primary documents linked above, read on October 3 and October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.