- Those who qualify for a tax return and received it after April 15th will receive a little more money due to the late tax day.
- These interest payments are taxable and will be taken into account in the tax returns for 2020.
- The amount will likely be small, depending on the amount of your refund and the time you submitted your taxes.
- You can find more stories on the Business Insider homepage.
You may receive a second, much smaller check this year, or a direct deposit from the IRS.
No, it's not another stimulus check – it's the interest the US government owes you.
Due to the corona virus pandemic, the tax day was postponed from April 15 to July 15. In a peculiarity of the tax code, which was first written in The Wall Street JournalThis new deadline means that taxpayers who filed on or before July 15 and qualified for a refund will receive interest on their refunds if they received it after April 15.
Basically, the IRS pays a fee for holding the money for an extended period of time. And yes, this means that there is a small advantage in filing taxes closer to July 15th.
There is usually a 45 day grace period to grant tax refunds, but the extension means that this is no longer the case. The IRS has worked in a city with a reduced upper limit while issuing stimulus checks.
During the routine tax season, the IRS will spend 90% of the tax returns within 21 days, which means that no tax returns will be paid. However, according to a June CBS News report, the IRS has 4.7 million lagging returns.
How much you will get
For every $ 1,000 refund, the taxpayer earns 14 cents per day interest for earlier dates and 8 cents per day for later dates. If you break this down further, tax refunds from April 15th to June 30th receive 5% APR for every $ 1,000 each, while refunds from July 1st to September 30th have 3% APR.
The IRS has not announced exactly how this extra money will be spent to taxpayers.
It is also important to note that this interest is taxable.
"This means that you will receive a 1099-INT for 2019 and pay taxes on it when you submit your return for 2020," said Pamela Lucina, chief trust officer of Northern Trust Wealth Management CNET.
Do you have any further questions about your taxes? Click here to read Business Insider's full guide.