If you filed your taxes after April 15, there may be extra money from the IRS in the form of an interest rate check. The tax day was July 15 due to the tax office moving the application date in response to it. And it was just one of several unconventional political changes the federal government undertook to help struggling Americans during the crisis. It also issued , which was sent to back in April. (If you have not received one yet, check out our guide at .)
on August 8 to provide additional exemption, including one for a payroll tax vacation and another for one (a potential extension – to a lower amount – of the $ 600 set forth in the CARES Act, which expired July 31). Democrats and Republicans have been negotiating for further liberation, which is part of the EU , was introduced in late July, which would include one .
But the stimulus payments are completely separate from tax rebates, millions of which are still processed by the IRS. The extension of the tax deadline 2020, 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 repayments that take extra time to process, with interest running from April 15 until when 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 of interest began 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 backlog, and this means that more people than usual will receive an interest payment from the tax authority this year.
Are these payments from the IRS different from the stimulus payments?
Yes. The CARES law provided a one-time periodto 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 will receive an interest payment?
Taxpayers who are eligible for a refund – who did not receive it by April 15 – will collect some interest. 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 fell to 3%. For every $ 1,000 paid 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.
When do I get my interest?
The IRS says tax revenue can come in a second check or direct deposit – though it 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.”
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.”