14 Million Americans Should Expect an IRS Check in the Coming Weeks
Most Americans should have already received their tax refunds by now, but almost 14 million people should get an additional check from the IRS soon. Last week, the Treasury Department and the Internal Revenue Service began sending out interest payments to 13.9 million Americans.
Extra Check
The interest payments will be on average on about $18, the IRS says. Payments will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund.
Most interest payments will be issued separately from tax refunds. Interest is paid at the legally prescribed rate that is adjusted quarterly. For the second quarter, which ended on June 30, 2020, the interest rate was 5% per year, compounded daily. For the current third quarter, which ends on September 30, 2020, the interest rate is 3% per year, compounded daily. That’s a much better rate than what banks are offering right now.
Taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account in most cases. So about 12 million of these payments will be direct deposited. About 1.9 million people will receive a check. A notation on the check − saying “INT Amount” − will identify it as a refund interest payment and indicate the interest amount.
Tax Implications
By law, these interest payments are taxable and taxpayers who receive them must report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10.
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Wish they could just process the refund on my amended return. There was a Turbo Tax software error that understated my credits so, after paying original tax due, I filed an Amended return to get $4600 refund. Submitted by 7/15 but IRS website doesn’t even show status and can’t reach anyone at their numbers. Won’t make a material change to my life but that would be nice gambling money for a weekend in Vegas so hope it comes eventually.
I believe (not a tax advisor) that the interest is on refunds not paid within 45 days of receipt of the return.