New IRS checks await Americans: what will the IRS pay
Any tax refund that occurred after April 15 will be charged and paid for the delay, the IRS reported on June 24. These percentages will be paid to taxpayers, although the deadline for filing tax returns has been extended until July 15. Writes about this Grow.
Taxpayers who file their returns by this deadline (July 15) and are eligible for a tax refund will be charged interest on delayed refunds. These, according to the IRS, "will be paid between April 15, 2020 and the date the refund is received and may be sent separately from the tax refund."
By law, the IRS must pay interest on tax refunds to those Americans who receive a late refund (45 days after the filing date). However, the tax code does not provide for the extension of deadlines for filing tax returns. As a result, the typical 45-day rule does not apply this year due to deviations in dates associated with coronavirus.
This means that even if you have not submitted your tax return for 2019, you may be eligible for interest on tax refunds.
How many Americans will receive interest
This year, the Internal Revenue Service has begun to process tax returns more slowly, as the coronavirus pandemic has forced many department employees to work from home or take leave.
As of June 12, the IRS received 136,5 million tax returns of individuals, but managed to process only 124,6 million. This is 12% less than in the same period last year.
“It's hard to know how many Americans will qualify for interest,” says Lisa Green-Lewis, a certified public accountant and tax expert at TurboTax. - This year, many Americans, who usually do not file tax returns, had to file them in order to receive payments related to the coronavirus. Since the IRS statistics include all these additional people, it is difficult to say how many returns the IRS still has to consider. ”
The Tax Administration said that tax refunds on declarations of individuals began to accrue on April 15. If you received a refund after this date or have not received it at all, then most likely you are entitled to interest.
And any further delays in the processing of returns by the IRS could lead to an increase in interest payments for some taxpayers. To date, the government has extended the deadline for filing tax returns until July 15, but officials are considering another extension until September 15.
How much money can I get?
Under the law, the interest rate on both overpayment and underpayment of tax is adjusted quarterly. For the second quarter, which ends June 30, 2020, the interest rate is 5% per year and is accrued daily. For the third quarter, which ends September 30, 2020, the interest rate will be 3% per year (accrued daily).
To calculate how much interest you can get, you need to use the average tax refund for 2020, which, according to the IRS, is $ 2. If this chargeback is delayed for 767 days, interest will be charged on it for about $ 30. This is more than you earn by storing your money in a savings account.
On the subject: Tax Season 2020: IRS extends filing deadlines for most Americans
This does not mean that you have to postpone filing in order to receive interest, says Green-Lewis: “I would not advise delaying filing a return. People are now short of money and need tax refunds, so don't delay filing just to get extra interest. ”
How interest is sent to taxpayers
Taxpayers can receive their interest payments separately from tax refunds, so be careful not to accidentally throw away the check if the interest is sent to you in this form.
It is also important to remember that any interest payment you receive from the IRS will be considered your taxable income in 2020, and it will need to be indicated in the next declaration.
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