IRS to Pay Interest on Delayed Tax Refunds
The IRS has announced that it will pay interest on delayed tax refunds due to this year’s tax deadline extension. Taxpayers who file their return on or before July 15, 2020 and are owed a refund will earn interest.
The IRS typically has a 45-day grace period to issue refunds to taxpayers who file by April 15 before interest starts accruing on the amount they are owed. Due to the tax deadline extension, if your refund is issued between April 15 and June 30 it will earn an annual interest rate of 5 percent. If your refund is issued between July 1 and Sept. 30 it will earn an annual interest rate of 3 percent. All interest is compounded daily and accrues between April 15 and the day the refund is issued.
Taxpayers can check the status of their refund using the IRS' tracking service within 24 hours of filing a tax return online.