Up to 14 million Americans will receive an interest payment after their tax deductions were delayed due to the coronavirus pandemic, the Internal Revenue Service (IRS) said.
The IRS announced this week that interest payments will be sent to approximately 13.9 million Americans who are currently filing their 2019 federal income tax return by the July 15 extended deadline and have received or are still awaiting a refund in the past three months. return.
However, no interest will be added to any refund issued before the original April 15 deadline.
About 12 million people who received their immediate refund through direct deposit will pay their interest payment the same way into the same account.
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The rest will receive a paper check, a notation of which will have “INT amount”, and identify it as the interest payment.
The size of the interest payment depends on the size of your tax return, and according to the IRS, the average interest payment is about $ 18.
But while that figure sounds small, the rate is actually quite generous. According to the IRS, the rate for the second quarter ending June 30 was 5 percent, compounded daily and effective July 1, the rate for the third quarter dropped to 3 percent, compounded daily.
The reason the IRS pays interest for tax compensation is because the deadline for filing tax was postponed to July 15 due to the ongoing coronavirus pandemic.
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“This year the COVID-19-related July 15 delayed date is considered a disaster-related postponement of the filing date,” the IRS said in a news release.
“Where a disaster-related proposal exists, the IRS is required by law to pay interest, calculated from the original April 15 deadline, as long as an individual files a 2019 federal income tax return through the proposed deadline – 15 July, 2020, in this copy. “
This required interest obligation only applies to individual income tax filers, which means that companies are not eligible.
The IRS said it would send a Form 1099-INT to anyone who receives interest totaling at least $ 10 in January 2021. By law, interest payments are taxable and those who receive them must report them to the federal government. income tax of 2020 which they submit next year, regardless of how small the payment amount.
More than 102 million tax dollars, worth more than $ 282 billion, were issued by the IRS as of July 24, according to the latest statistics published by the agency. The figures showed a 3 percent decrease from the same point in 2019.
On its website, the IRS has acknowledged that the agency is taking longer to process email documents due to COVID-19 related delays.
If you are still waiting for your tax refund, you can check the status with the Where’s my refund? Tools on the IRS website. You will need your Social Security number like ITIN, your submitter status and your exact refund amount.
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