IRS Corrects Previously Released Loss Reserve Discount Factors

The Internal Revenue Service (IRS) issued Rev. Proc. 2021-54 on December 13, 2021, which contains the new discount factors for the 2021 tax year. These factors were determined using the applicable interest rate for 2021 under code section 846(c) of 2.84%, compounded semiannually.

Linked below is a table that summarizes the new factors to use for computing discounted unpaid losses and estimated salvage and subrogation as prescribed for the 2021 tax year.

The IRS recently revised the 2021 discount factors after discovering an error in the originally released factors. Rev. Proc. 2021-54 has been updated and the corrected table is included below.

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This insight has been updated as of January 12, 2022 to reflect new information.