Tax Day fell on July 15 this year after the IRS postponed the traditional April 15 deadline due to. And this is just one of several unconventional policy maneuvers carried out by the federal government to help struggling Americans during the pandemic – in addition to issuing a stimulus check and increasing unemployment benefits by $ 600.
And although the future of these two benefits remains unclear,, we know that the extension of the tax deadline continues to pay off – at least for some taxpayers. In addition to giving more time to fill out paperwork, calculate repayments and scrape together payments, the payment will mean a few more dollars – in addition to the repayments – in the form of a second check from the government. Read on to find out if you can expect to receive a second payment from the IRS and when it may appear in your bank account or mailbox.
Why does the IRS send a second check to certain households?
Each year, the IRS pays interest on repayments that take extra time to process, with interest running from April 15 until each time they reduce your check (or release your direct deposit). This year, the accrual period began on April 15, as usual – did not submit until July 15. So in fact, there was a modest but real benefit to filing later this year.
Who gets a second check?
Taxpayers who are eligible for a refund – who did not receive it by April 15 – will collect a certain amount. The sum of that interest can be sent out as a second check or direct deposit.
How much do I get?
As usual, the IRS will pay 5% annual interest, compounded daily through June 30. On July 1, the interest rate will fall to 3%. For every $ 1,000 that comes back to you, you can expect to accrue approximately $ 0.14 interest per day between April 15 and June 30 and $ 0.08 per day thereafter.
Is there a catch?
There is always a catch.
“The interest is taxable,” said Pamela Lucina, head of trusteeship and head of trust and advice at Northern Trust Wealth Management. “This means that you will receive a 1099-INT for 2019 and will pay tax on it when you submit your 2020 return.”
When will I receive my second check?
The IRS says that the interest payment could be paid in a second check or direct deposit, although it can also be added to a future repayment. There is no specific date for when payments will be sent, but the agency says it will be later this summer.