Yes, you read that right. Don’t be surprised if you find an additional check from the IRS in your mail box, or an electronic deposit in your bank account. The IRS started sending interest payments to individual taxpayers who reported tax refunds on their 2019 tax return filed by July 15, 2020. They usually have 45 days to issue the tax refund without paying interest, but since COVID-19 is considered a disaster-related issue, the 45 day rule doesn’t apply.
The IRS must pay interest on the 2019 tax refunds from April 15, 2020 to the date the refund was issued. The interest rate is 5% through June 30, 2020 and 3% from July 1, 2020 through September 30, 2020.
Unfortunately, if the IRS issued you a refund before April 15, 2020, no interest will be paid.
The IRS will send you a Form 1099-INT if interest paid exceeds $10 as the interest payment is taxable.
Questions? Please contact us at 401-831-0200.