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IRS Delivers Refund Interest Checks To 13.9 Million Taxpayers

San Francisco: Americans who filed their 2019 federal income tax returns on time should expect a refund this week from Treasury Department and the Internal Revenue Service.

According to IRS, The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.

In most cases, almost 12 millions of taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account.

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Everyone else will receive a check. A notation on the check − saying “INT Amount” − will identify it as a refund interest payment and indicate the interest amount.

These interest payments are taxable by law and taxpayers who receive them must report the interest while filing next year on the 2020 federal income tax return.

In January 2021, the Internal Revenue Service (IRS) will send a Form 1099-INT to anyone who receives interest totaling at least $10.

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This provision is different from the long-standing 45-day rule, generally requiring the IRS to add interest to refunds on timely-filed refund claims issued more than 45 days after the return due date.

Instead, this year’s pandemic COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline. Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the postponed deadline − July 15, 2020, in this instance.

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This refund interest requirement only applies to individual income tax filers − businesses are not eligible.

A W-4 form is viewed in New York. As the covid19 pandemic took hold this spring, the federal government postponed the traditional April 15 filing deadline until July 15.

Interest is paid at the legally prescribed rate that is maintained quarterly. The rate for the second quarter ending June 30 was 5 percent, compounded daily. Effective July 1, the rate for the third quarter dropped to 3 percent, compounded daily.

Where the calculation period spans quarters, a blended rate applies, consisting of the number of days falling in each calendar quarter. No interest will be added to any refund issued before the actual April 15 deadline.

Shreya Sharma

Hey this is Shreya From ShoppersVila News. I'm a content creator belongs from Ranchi, India. For more info contact me [email protected]

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