Late tax records can get a second check from the IRS. The tax day moved to 15 July due to the Swedish Tax Agency moving in the due date in response. And it was just one of several unconventional political changes that the federal government undertook to help struggling Americans during the crisis. It was also issued , which was sent to back in April. (If you have not received one yet, check out our guide at .)
August 8 to provide additional exemption, including one for a payroll tax vacation and another for one (a potential extension – for a lower amount – of the $ 600 provided in the CARES Act, which expired on July 31). Democrats and Republicans have been in negotiations for further relief included in , which was introduced in late July, which would include a .
But the stimulus payments are completely separate from tax rebates, millions of which are still processed by the IRS. The extension of the 2020 tax deadline, which gave all taxpayers more time to complete paperwork,and scraping together payments, will also lead to some taxpayers getting a few more dollars from the government. Read on to find out if you can expect to receive a second tax refund from the IRS – and when it can 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 coming in from April 15 until the agency cut your check (or lost your direct deposit). If you have not yet received your refund check, you are not alone: the IRS said as early as June that it had a backlog of 4.7 million returns.
This year, the interest withdrawal period began on April 15, as usual – even if you did not submit until July 15. So it was actually a modest but real advantage to submit later this year. Pair it with the IRS backlog, and that means more people than usual will receive an interest payment from the IRS this year.
Are these payments from the IRS different from the incentive payments?
Yes. The CARES Act provided a one-off 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’s . But they are completely separate and differ from this year’s tax refunds and tax interest payments.
Who will receive an interest payment?
Taxpayers who are eligible for a refund – who did not receive it by April 15 – will collect a certain amount of interest. The sum of this interest can be sent out as a second check or direct deposit.
How much do I get?
As usual, the IRS pays 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 will I receive my interest payment?
The IRS says tax revenue can come in a second check or direct deposit – although 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 come later this summer.”
Is there a catch?
There is always a catch.
“The interest is taxable,” said Pamela Lucina, head of administration and head of trust and advisory practice at Northern Trust Wealth Management. “That means you will receive a 1099-INT for 2019 and pay tax on it when you submit your 2020 return.”