Overview
When CBP holds money that was not legally owed — as it did with IEEPA duties invalidated by Learning Resources, Inc. v. Trump — it pays interest on the overpayment from the date the duty was deposited. That interest can add materially to the total recovery on a large refund, particularly where the entry payment date was early in the IEEPA window (February 2025) and CBP's refund processing extends into late 2026 or beyond.
This guide explains the statutory basis for CBP interest on duty overpayments, how the quarterly rate is set and published, how daily compounding works in practice, and how un-tariff walks the rate table to compute an accurate interest figure. Use the free calculator for a quick estimate; the section below shows the math behind it.
The statutory basis
Two statutes govern CBP interest on duty overpayments:
- 19 U.S.C. § 1505(c) — CBP's authority to pay interest on overpayments. It provides that, where a duty has been overpaid, CBP shall pay interest on the excess amount from the date the deposit was made. This is the provision that creates the obligation; the rate is set by cross-reference to the Internal Revenue Code.
- 26 U.S.C. § 6621(a)(1) — the overpayment interest rate. Interest on overpayments runs at the federal short-term rate (as determined monthly by the IRS under § 6621(b)) plus 2 percentage points. Congress set this margin to compensate taxpayers — and by incorporation, importers — for the time value of money the government held without legal basis.
Read together, these provisions mean CBP is required by statute to pay interest on IEEPA refunds. It is not discretionary and does not require a separate claim. The interest computation runs automatically and is included in the CAPE payment.
How the rate is set (quarterly)
The IRS computes the federal short-term rate each month based on average yields of Treasury obligations maturing in three years or less, then rounds to the nearest whole percent. The short-term rate in effect during the first month of each calendar quarter becomes the rate for that entire quarter. The IRS publishes the quarterly overpayment rate in a Revenue Ruling (e.g., Rev. Rul. 2026-XX for each calendar quarter), and CBP announces adoption of the rate in a CSMS message to the trade community.
This means the rate your IEEPA refund accrues interest at is not fixed for the life of the claim. A refund spanning multiple calendar quarters — for example, a deposit made in March 2025 with CBP disbursement expected in late 2026 — will accrue at different rates across different quarters as the federal short-term rate changes. The quarterly step-down or step-up is the reason a simple "rate times days" calculation underestimates or overestimates the true interest figure.
Quarterly rate announcements are available through CBP's CSMS message archive and the IRS Rev. Rul. series. un-tariff's internal cbp_interest_rates registry is updated each quarter when CBP publishes the CSMS notice, with effective_from and effective_to dates and a source_citation field pointing to the specific CSMS message and IRS Rev. Rul. number.
How CBP compounds interest
26 U.S.C. § 6622 requires daily compounding. Interest accrues on the growing balance each calendar day, not just on the original principal. The daily factor is the annual rate divided by 365 (not 360 — CBP uses the actual-over-365 day-count convention).
The practical difference is meaningful. Consider a $100,000 overpayment held for 365 days at a 7% annual rate:
- Simple interest: $100,000 × 7% = $7,000.00
- Daily compounding (365 days): $100,000 × (1 + 0.07/365)^365 − $100,000 ≈ $7,250.08
That is approximately $250 of additional recovery on a $100,000 principal at 7% for one year — roughly 3.6% more than simple interest, and the margin grows with both the principal and the holding period. On a $1 million refund held for 18 months across two quarters with a rate change, the compounding effect is correspondingly larger.
Worked example: $100K IEEPA refund over 365 days
The table below illustrates a hypothetical $100,000 IEEPA refund with a deposit date in early Q1 2026 and a projected CBP disbursement 365 days later. Placeholder rate labels are used; actual rates come from un-tariff's cbp_interest_rates registry, which is updated each quarter when CBP publishes the CSMS notice.
| Quarter | Annual rate | Days in period | Daily factor | End-of-period balance |
|---|---|---|---|---|
| Q1 2026 (remainder) | CBP's Q-1 2026 published rate | ~60 | rate / 365 | $100,000 × (1 + factor)^60 |
| Q2 2026 | CBP's Q-2 2026 published rate | 91 | rate / 365 | prior balance × (1 + factor)^91 |
| Q3 2026 | CBP's Q-3 2026 published rate | 92 | rate / 365 | prior balance × (1 + factor)^92 |
| Q4 2026 (partial) | CBP's Q-4 2026 published rate | ~122 | rate / 365 | prior balance × (1 + factor)^122 |
Each row carries the ending balance from the prior row into the next quarter's daily compounding. The rate steps up or down at each quarter boundary without resetting the balance — the compounded balance rolls forward at the new rate. This is the walk that un-tariff's rule CAPE-INT-001 codifies in the audit trail.
Why does this matter for long IEEPA recoveries? Entries with deposit dates in February or March 2025 — the earliest part of the IEEPA window — are accumulating interest across five or more quarters by the time CBP processes them. Even a modest rate increase or decrease between quarters shifts the total by several hundred dollars per $100,000 of principal. Getting the quarter-boundary dates right and applying the correct per-quarter rate is the difference between an accurate interest estimate and a reconciliation variance when CBP's check arrives.
The accrual window for IEEPA refunds
Interest accrues from the Date of Deposit — the date the importer paid the entry summary duty — through CBP's refund disbursement date. The Date of Deposit is the entry summary payment date visible in the ACE Entry Summary export. It is not the entry filing date and not the liquidation date; it is the actual payment date, which may lag the filing date by up to 10 business days under CBP's standard payment terms.
The accrual stops on the date CBP issues the refund:
- ACH-enrolled importers: CBP disburses via ACH on the same day as its periodic check run. Accrual ends on that date.
- Paper-check importers: CBP issues the check on the same run date, but the check requires approximately 10 business days to arrive and clear. The interest accrual ends on CBP's issue date, not the date the check is deposited — so paper-check importers receive the same interest amount but receive it later.
ACH enrollment matters
ACH enrollment does not change the interest rate, but it affects when the accrual window closes. An importer who is not enrolled in ACH (via CBP Form 400 or Pay.gov ACH Debit) will receive the same interest on the refunded principal, but the refund disbursement will arrive approximately two weeks later than for an ACH-enrolled importer on the same check run.
More practically: during the period between CBP's check-run date and the paper-check clearing date, interest is no longer accruing. The importer receives the interest through the check-run date — not through the clearing date. ACH enrollment is a one-time administrative setup; for importers with large refunds pending, the two-week difference in disbursement timing can be meaningful from a cash-flow perspective even if the interest amount is the same.
How un-tariff calculates it
un-tariff computes IEEPA refund interest in three steps, governed by rule CAPE-INT-001:
- Pull the entry deposit date from ACE. The Date of Deposit field in the ACE Entry Summary export is the accrual start date. un-tariff reads it directly from the uploaded ACE CSV rather than using the filing date or liquidation date, which would produce the wrong result.
- Walk the versioned cbp_interest_rates table. un-tariff's
cbp_interest_ratesregistry holds each CBP quarterly overpayment rate witheffective_fromandeffective_todates and a reference to the governing CSMS message and IRS Rev. Rul. For the deposit-to-today span, the calculator steps through each quarter boundary and applies the rate in force during that period. - Compound daily within each quarter. Within each quarterly segment, un-tariff applies the formula
balance × (1 + rate/365)for each calendar day in the segment, carrying the cumulative balance forward to the next quarter. The final balance minus the original principal is the interest owed. Every step is recorded in the audit trail so CBP can reproduce the exact computation during reconciliation.
The interest estimate updates each time you run the calculator, because the accrual end date (today, or projected disbursement date) advances. The registry itself is updated each quarter when CBP publishes the CSMS notice for the new rate.
Common questions
Why does CBP pay interest at all?
19 U.S.C. § 1505(c) requires CBP to pay interest on duty overpayments from the date the overpayment was made. The rationale is straightforward: CBP held money that was not legally owed, and interest compensates the importer for the time value of that money during the period CBP held it.
What rate applies to my refund right now?
The rate is the federal short-term rate plus 2 percentage points — the overpayment rate under 26 U.S.C. § 6621(a)(1). The IRS sets the federal short-term rate each calendar quarter based on average Treasury bill yields, and CBP adopts it via CSMS message. The rate can change every January 1, April 1, July 1, and October 1. Check CBP's most recent CSMS announcement for the current quarter's figure.
Daily or annual compounding?
Daily compounding, per 26 U.S.C. § 6622. This means interest accrues on the growing balance, not just the original principal. On a 12-month accrual, daily compounding produces approximately 3–4% more interest than simple interest at the same annual rate — material on large principal amounts.
Does ACH enrollment change the interest rate?
No. The rate is statutory and applies equally regardless of payment method. However, ACH enrollment stops the accrual clock roughly two weeks earlier than paper check. CBP disburses ACH refunds on the same business day as the check run; paper checks add approximately 10 business days of mail and processing time during which interest is no longer accruing on your behalf.
Can I accrue interest on denied portions of my claim?
No. Interest accrues only on the refunded principal — the portion CBP determines is a valid IEEPA overpayment. If CBP partially approves a claim, interest is calculated on the approved amount only. Denied entry lines accrue no interest under either the CAPE or protest tracks.
Ready to estimate the interest accrued on your IEEPA overpayments? The free calculator uses your entered duty totals and deposit date range to produce a refund band with interest. For the full step-by-step filing workflow, see the complete CAPE filing guide.