The IRS sent nearly 14 million checks to individual taxpayers in mind-August. These checks went to people who filed their 2019 federal income tax return by the July 15 deadline and were owed refunds.
The interest is a result of the IRS postponing this year’s filing deadline to July 15. Because the change was related to COVID-19 and it is therefore considered a disaster-related postponement, the law requires the IRS to pay interest calculated from the original April filing deadline.
These were not big checks, they averaged about $18. And they were mysteriously issued separately from tax refunds. But the checks are legitimate.
If you paid by direct deposit then check your bank account for the interest payment. The note on the check will be “INT Amount.”
Of course, the interest payments are taxable. Taxpayers who received a payment must report it on their 2020 federal income tax return next year. If the payment was $10 or more, then you will receive a Form 1099-INT in January 2021.
This refund interest only applies to individual taxpayers. Businesses aren’t eligible.