2022 and later:
The rules of IRS Notice 2022-6 apply for 2022 and later. The maximum interest rate allowed is 5% or 120% mid-term rate for either of the two months preceding the date of the distribution.
2002 through 2021:
The rules of Rev. Rul. 2002-62 apply for 2003 and later (or optionally for 2002). The interest required to be used is the 120% mid-term rate for either of the two months preceding the date of the distribution.
2002 and earlier:
A so-called “reasonable” interest rate is required when using the Amortization or Annuitization Methods to compute a pre-59½ plan distribution that avoids the 10% penalty for early distributions. The program limits you to entering a rate no higher than the AFRs for the previous two months.
Prior to 2002, see IRS Notice 89-25, 1989-1 C.B. 662, Q&A 11 and 12). In various letter rulings, the IRS has accepted use of the 120% Annual Long-Term Applicable Federal Rate for the month in which distributions start. Some commentators read some of the rulings as saying that you should use 120% of the Annual Long-Term Rate, which is slightly different. However, the difference may be seen as de minimus. If you judge this rate to be appropriate in the software. Letter Rulings cannot be used as binding authority for IRS positions. Since the IRS has not issued any rulings other than Letter Rulings on the topic of “reasonable” interest rates for pre-59½ distributions, there is no binding authority on this topic.