Why did I earn interest on my tax refund?
Anyone else get their refund late? I notice a notation on the refund check bottom left: INT $5.29. The federal government actually pays interest on late payment? I suspect I'm not the only one who thinks that's weird.
- SlickterpLv 72 months ago
They do pay interest.
- RICKLv 72 months ago
Refunds for those that did paper returns early were delayed due to coronavirus layoffs and the processing of the stimulus payments, so to make up for the delay they paid interest
- Max HooplaLv 72 months ago
If IRS doesn't get your refund issued within 45 days of receipt of your return you are entitled to interest on the refund.
- SumDudeLv 72 months ago
Only you think it is weird. We who have done our own taxes for years know that the government pays interest when due to the taxpayer.
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- PhilLv 62 months ago
Yes They do pay interest if the refund is late.
I am not sure if the IRS decided to do this themselves or there was a court case that brought this about. My cynicism says it was a court case.
Some tax refunds are quite large and if the taxpayer was refunded late would be considerably worse off if it was received late and without interest.
Also it would be quite hypercritical for the IRS to charge interest for late payment from a taxpayer but not give interest it the refund was late because of themselves.
Obviously the IRS has set a processing time from receiving the tax return and giving any refund back. I am not sure how many weeks that is.
- JudyLv 72 months ago
yes they do, after a certain amount of time. Next year you'll get a 1099-int for it and have to claim it as income.