As a result of the coronavirus pandemic, the IRS gave Americans three additional months to file their 2019 taxes, extending the deadline from April 15 to July 15. While many people will have received their tax refunds by now, some may not know another check or direct deposit is coming their way.
By law, the IRS is required to pay people interest on refunds received 45 days after the typical April 15 filing date. Since this year's extension is considered disaster-related postponement, the IRS must pay interest on these refunds as well.
The interest rate accrued for the second quarter, which ended June 30, is 5% per year, compounded daily. The interest rate for the third quarter, ending September 30, is 3% per year, compounded daily. The average amount of interest payments is $18.
If you got your tax refund after April 15, or if you filed on time and are still waiting for a refund, you're likely due for an interest check. Interest payments were sent to "nearly 14 million individual taxpayers" in mid-August, according to the IRS.
People who got these payments filed their 2019 federal income tax returns by July 15.
Video by David Fang
There are several ways to check if you've already received your interest owed:
- If you gave the IRS direct deposit info for your refund, check your bank statements to see if any small amounts of money were credited to your account from the U.S. Treasury.
- If you received your refund via paper check, that's how your interest check is likely to arrive, too. Keep an eye out for mail from the U.S. Treasury. If you get a check, look for notation saying "INT Amount."
- Finally, you can call the IRS at 800-829-1040 to ask them about your interest check. Experts warn, however, that wait times are at least 90 minutes long.
Keep in mind, too, that interest payments are taxable and that you must report the interest in your 2020 federal income tax return. The IRS will send form 1099-INT to anyone who receives interest of $10 or more.
More from Grow: