72(t)/SEPP Maximum Interest Rate Table
The monthly federal mid-term AFR and its 120% cap — the rate ceiling for a 72(t)/SEPP fixed amortization or annuitization payment — read directly from each month's IRS Revenue Ruling, not rounded or estimated.
Right now, the effective cap for a SEPP first distribution taken in Sep 2026 is 5.40% — the greater of the 5% floor and 120% of the Sep 2026 mid-term AFR (5.40%), per 2026-17.
| Month | Rev. Rul. | Mid-term AFR | 120% mid-term AFR | Effective SEPP cap |
|---|---|---|---|---|
| Sep 2026 | 2026-17 | 4.49% | 5.40% | 5.40% |
| Aug 2026 | 2026-13 | 4.35% | 5.23% | 5.23% |
| Jul 2026 | 2026-12 | 4.35% | 5.23% | 5.23% |
| Jun 2026 | 2026-11 | 4.13% | 4.97% | 5.00% |
| May 2026 | 2026-9 | 4.08% | 4.91% | 5.00% |
| Apr 2026 | 2026-7 | 3.82% | 4.59% | 5.00% |
| Mar 2026 | 2026-6 | 3.93% | 4.72% | 5.00% |
| Feb 2026 | 2026-3 | 3.86% | 4.63% | 5.00% |
| Jan 2026 | 2026-2 | 3.81% | 4.57% | 5.00% |
All rates are annual compounding, matching the convention Notice 2022-6 uses. Each row is Table 1 of that month's Revenue Ruling, unrounded — not the separately-published (and separately-rounded) §7520 rate.
What this rate governs
IRS Notice 2022-6 Q&A 4 caps the interest-rate assumption used by a 72(t)/Substantially Equal Periodic Payment (SEPP) series computed under the fixed amortization or fixed annuitization method at the greater of 5% or 120% of the federal mid-term Applicable Federal Rate (AFR), for either of the two calendar months immediately preceding the month the first distribution is taken. The RMD method uses no interest rate at all — this table doesn't affect it.
The AFR itself has nothing to do with SEPP specifically. IRC §1274(d) requires the IRS to publish short-term, mid-term, and long-term Applicable Federal Rates every month, primarily to value below-market loans and certain debt instruments. Notice 2022-6 borrows the mid-term column — and a 120% multiple of it — as a market-linked reference rate for SEPP purposes, rather than defining a bespoke one.
Why the cap moved during 2026
For every month from January through June 2026, 120% of the mid-term AFR sat below 5% — so the 5% floor was the binding constraint and the AFR's monthly movement was, in effect, irrelevant to the cap. Starting with July 2026, 120% of the mid-term AFR rose above 5% and became the binding figure instead, and it has continued to reset each month since. A SEPP series established earlier in 2026 locked in whatever rate applied at that time — the cap only matters at the moment the series begins; it is not revisited later even as the published rate moves.
Reading this table
- Pick the right month(s). Notice 2022-6 gives you a choice of either of the two months immediately before your first distribution's month — look up both and use whichever produces the rate you want (usually the higher one, since a higher rate raises the fixed payment).
- "Mid-term AFR" is the raw published rate — the input the 120% multiple is computed from. It is not itself the SEPP cap.
- "Effective SEPP cap" already applies the 5% floor — this is the number to compare your chosen rate against.
- Only U.S. federal mid-term AFR history is shown here — the short-term and long-term columns IRS also publishes each month govern unrelated provisions and aren't relevant to a SEPP.
Sources: IRS — Applicable Federal Rates (monthly Revenue Rulings, Table 1) · IRS Notice 2022-6 (2022-05 IRB), Q&A 4 · IRC §1274(d)
This table is for informational and educational purposes only. It is not financial, tax, or legal advice. Verify the current month's figure directly against the linked IRS source before relying on it to establish a SEPP series.
Last reviewed: Sep 2026 · Per IRS Notice 2022-6 and the Revenue Ruling cited in each row above.
Frequently asked questions
Which month's AFR do I use for my SEPP?
IRS Notice 2022-6 Q&A 4 lets you choose the 120%-of-mid-term-AFR rate for either of the two calendar months immediately preceding the month your first distribution is taken — not necessarily the current month. If your first distribution is in November, you may use October's or September's published rate, whichever is more favorable. Look up both months in the table above.
Why is the cap "the greater of 5% or 120% of the AFR," not just the AFR itself?
Notice 2022-6 Q&A 4 sets a 5% floor specifically so the maximum rate never falls with market conditions below what the IRS considers a reasonable minimum for this purpose. When 120% of the mid-term AFR is below 5% (as it was for most of early 2026), the 5% floor is what actually governs — the AFR figure itself becomes irrelevant until it rises above 5%.
Is this the same rate used for gift and estate tax (the §7520 rate)?
They're related but not always identical. The §7520 rate is defined by statute as 120% of the federal mid-term rate for the month, rounded to the nearest two-tenths of a percent. The SEPP cap in Notice 2022-6 also uses 120% of the mid-term AFR, but as the exact, unrounded Table 1 figure — the two can differ by a hundredth of a percent or two after §7520's rounding. Use this page's figures for a SEPP; don't substitute the published §7520 rate.
Does a lower interest rate assumption ever make sense?
Yes. Notice 2022-6 sets a ceiling, not a required rate — you may use any rate at or below the greater of 5% or 120% of the mid-term AFR for your chosen month. A lower rate produces a smaller fixed payment (and a smaller required balance under the reverse-solve on the 72(t)/SEPP calculator), which some planners choose deliberately to build in a cushion.
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