IRS Tax Refunds Severely Delayed; Taxpayers to Receive Interest on Delayed Refunds
Where’s My Refund?
Millions of taxpayers who filed their taxes before the new deadline of July 15th, and even before the original deadline of April 15th are still wondering why they have not received their refund from the IRS. To check on the status of your tax refund, click here.
The significant delay in refunds this year is primarily due to office closures and other measures the IRS had to take to comply with social-distancing requirements and other COVID-19 related accommodations. Taxpayers have less help available in filing their taxes and the IRS have less resources and staff available to process the returns. Further, the IRS also had to deliver over 160 million stimulus checks to Americans as well, so that task added to the backlog of tax returns and refunds.
The Good News:
The good news is that IRS workers are back in the office as of this month working to get through the backlog of returns and refunds. Even better news, perhaps, is that taxpayers will be entitled to interest on their delayed refunds.
Any individual income tax refunds issued after April 15th will be paid with interest, even though the tax-filing deadline has been extended to July 15th. When refunds are delayed, the IRS pays interest rates far higher than bank accounts do: 5% compounded daily for the second quarter and 3% compounded daily starting July 1st. It is possible, however, that interest payments will arrive separately from the refunds themselves. Despite the delays, e-filing your return and opting for direct deposit is still the quickest way to get your refund.