Tax Day fell on July 15 this year after the IRS postponed the traditional April 15 deadline due to. And it was just one of several unconventional political maneuvers the federal government has taken to help struggling Americans during the coronavirus pandemic. It also issued , which was sent to back in April. (If you have not received one yet, check out our guide at .)
ONEwas an important component of the GOP’s , announced Monday. It could help offset the loss of the extra $ 600 in unemployment benefits included in the CARES Act, which will expire on July 31. (Note that Republicans have proposed a new unemployment benefit for .)
But stimulus payments are completely separate from tax refunds, millions of which are still processed by the IRS. The tax deadline for 2020 is extended, which gave all taxpayers more time to fill in paperwork,and scraping together payments, will also result in some taxpayers getting a few more dollars from the government. Read on to find out if you can expect to receive a second payment of the tax 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 refunds that take extra time to process, with interest running from April 15 until the agency lowers your check (or lost your direct deposit). If you have not yet received your refund check, you are not alone: the IRS said back in June that it had an order backlog of 4.7 million returns.
This year, the accrual period began interest on April 15, as usual – even if you did not submit until July 15. So in fact, there was a modest but real benefit to filing later this year. Pair it with the IRS order backlog, and that means more people than usual will receive a tax payment fee from the IRS this year.
Are these payments from the IRS different from the stimulus payments?
Yes. The CARES law once gaveto eligible U.S. residents, designed to provide financial relief to the millions of people economically affected by the pandemic. It’s a little confusing – because the stimulus checks were issued by the IRS, and based on a taxpayer . But they are completely separate and differ from this year’s tax refunds and tax payments.
Who gets an interest payment?
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 collect about 14 cents in interest per day between April 15 and June 30 and 8 cents 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 do I receive my interest payment?
The IRS says that tax payments can come in a second check or direct deposit – although they can also be added to an upcoming refund. In an email to CNET, the IRS said: “The exact time has not yet been determined, but it will be later this summer.”