Still Waiting on a Tax Refund? The IRS May Owe You Interest

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  • If your tax refund is delayed, the IRS may owe you interest. 
  • Refunds paid out more than 45 days from the tax filing deadline are subject to interest charges.  

Some taxpayers may have an interest payment coming from the IRS.

The Internal Revenue Service is experiencing significant delays. Due to staffing shortages and the pandemic, it's taking longer for the IRS to process returns and issue refunds. For this reason, you may be waiting longer than usual to receive your tax refund. If you're still waiting for a tax refund, you may be owed interest. Find out what you need to know.

According to the IRS, most refunds are issued within 21 calendar days. But that's not always the case for everyone. Due to delays, some taxpayers will wait much longer for their refunds. 

The IRS must process and pay returns within 45 days of the mid-April tax return due date. If not, it is responsible for paying interest on the refund amount. If you're still waiting on a 2021 tax refund and continue to wait well into June, the IRS will owe you interest. 

What this means for taxpayers 

If you're owed a refund, and the IRS still hasn't paid you 45 days past the tax-filing deadline, the agency will owe you interest. This payment will come as a separate check.

Once the 45-day period passes, interest compounds daily. The IRS outlines the interest rate every quarter. As of April 1, 2022, the current interest rate is 4%. 

One essential piece of information: Interest payments from the IRS are taxable. The IRS will issue a 1099-INT to all taxpayers who receive an interest payment of $10 or more. That means you'll need to claim any interest payment as income. 

Could the IRS owe you an interest payment check? 

As of April 29, 2022, the IRS still had 9.6 million unprocessed individual tax returns. This total includes returns filed in 2020 and 2021.

If you're waiting on a refund check, and don't receive it within 45 days from the tax-filing due date, you can expect to be paid interest. While waiting for the money you're owed is no fun, it's nice to know the IRS is responsible for paying out interest after a certain period. 

Are you wondering what the average interest payment is? In 2020, the average interest payment from the IRS was $18. Nearly 14 million individual taxpayers received interest payments that year. 

Plan for next year's tax-filing deadline 

While April is far away, it's never too early to get organized and prepare for next year's tax-filing deadline. Keeping accurate records can help you make the filing process more manageable. 

Tax season doesn't have to be stressful. If you want to make the process easier, you may want to use online tax software. You can quickly complete your return and file electronically. If you file a paper return, you may experience longer processing delays

Review our best tax software list to learn more about your options. 

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