IRS is Sending Interest Checks to 14 Million Tax Payers Who Filed After April 15

Up to 14 million Americans will be receiving an interest payment after their tax refunds were delayed because of the coronavirus pandemic, the Internal Revenue Service (IRS) said.

The IRS this week announced that interest payments will be sent to around 13.9 million Americans who timely filed their 2019 federal income tax returns by the extended deadline of July 15 and either received a refund in the past three months or are still waiting for a refund.

However, no interest will be added to any refund issued before the original April 15 deadline.

Around 12 million people who received their tax refund by direct deposit will have their interest payment paid the same way into the same account.

The remainder will receive a paper check, which will have a notation saying "INT Amount" on it, identifying it as the interest payment.

The size of interest payment depends on the size of your tax refund, 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 is paying interest on tax refunds is because the tax filing deadline was postponed to July 15 due to the ongoing coronavirus pandemic.

"This year's COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline," the IRS said in a news release.

"Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the postponed deadline − July 15, 2020, in this instance."

This refund interest requirement only applies to individual income tax filers, meaning businesses are not eligible.

The IRS said it will send a Form 1099-INT to anyone who receives interest totaling at least $10 in January 2021. By law, the interest payments are taxable and those who get them must report them on the 2020 federal income tax return they file next year, no matter how small the payment amount.

More than 102 million tax refunds, worth more than $282 billion, had been 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 mailed documents due to COVID-19 related delays.

If you're still waiting for your tax refund, you can check its status using the Where's My Refund? Tool on the IRS website. You will need your Social Security Number or ITIN, your filing status and your exact refund amount.

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The Internal Revenue Service headquarters building appeared to be mostly empty April 27, 2020 in the Federal Triangle section of Washington, DC. Chip Somodevilla/Getty Images