On any tax return, which was produced after April 15 will accrue and pay interest for the delay, announced on 24 June the US internal revenue service (IRS). These percentages will be paid to taxpayers, despite the fact that the deadline for filing tax returns has been extended to July 15. Writes about this Grow.
Taxpayers who submit returns by this deadline (July 15) and are entitled to a tax refund, will charge interest for delay of refund. They are, according to the IRS, “will be paid between April 15, 2020 and the date of receipt of the return and can be sent out separately from tax refunds”.
By law, IRS must pay interest on tax refunds to those Americans who got a refund with late (45 days after date of filing). However, the tax code does not provide for an extension of time for filing tax returns. As a result, a typical 45-day rule does not apply this year due to the variances in the dates associated with the coronavirus.
This means that even if you have not filed your return for the year 2019, you may be entitled to receive interest on tax refunds.
How many Americans will earn interest
This year the IRS has become slower to process tax returns, as the pandemic coronavirus have prompted many Agency staff to work from home or go on compulsory leave.
As of June 12, the IRS received 136.5 million of the tax returns of individuals, but managed to only handle 124,6 million Is 12% lower than the same period last year.
“It is difficult to understand how many Americans will have the right to interest, says Lisa Greene-Lewis, a certified public accountant and TurboTax tax expert. — This year, many Americans who typically do not submit tax returns, had to file them to get the payments associated with a coronavirus. As the statistics the IRS includes all of these additional people, it is difficult to say how many returns the IRS has yet to consider.”
The IRS said that refunds for returns of individuals began to accrue from April 15. If you receive a refund after this date or do not yet received it, you most likely are entitled to interest.
And any further delay in processing returns from the IRS can lead to an increase in interest payments for some taxpayers. To date, the government has extended the deadline for filing tax returns until July 15, but officials are considering the possibility of another extension until September 15.
How much money you can get
By law, the interest rate as the overpayment and underpayment of tax are adjusted quarterly. For the second quarter, which ends June 30, 2020, the interest rate is 5% per year and is accrued daily. For the third quarter, which ends up on 30 September 2020, interest rate of 3% per year (accrued daily).
To calculate how much interest you can obtain, you need to use the average amount of tax refund for the year 2020, which, according to the IRS, is $2 767. If this payment is delayed for 30 days, it will accrue interest in the amount of about $12. This is more than you earn by keeping your money in a savings account.
This does not mean that you should postpone the submission of a Declaration to receive interest, says Greene-Lewis: “I would not advise to postpone the submission of the Declaration. People are now experiencing a shortage of money and need tax reimbursement, so don’t delay filing of declarations only in order to obtain additional interest”.
How to send taxpayers a cent
Taxpayers can receive their interest payments separately from the tax return, so be careful not to accidentally throw out a receipt, if interest you will receive in this form.
It is also important to remember that any interest payment that you receive from the IRS will be deemed as your taxable income in the year 2020, and it will need to provide the following Declaration.