Millions of Americans are opening their banking apps and mailboxes and are finding money from the government they weren’t expecting.
coronavirus “stimulus check”; Congress still hasn’t settled on whether send out a second round of relief payments. Besides, the amounts this time are much smaller.” data-reactid=”33″ type=”text”>No, it’s not another coronavirus “stimulus check”; Congress still hasn’t settled on whether send out a second round of relief payments. Besides, the amounts this time are much smaller.
Most people got $1,200 in stimulus money earlier this year. The direct deposits and checks people started receiving from the IRS last week average just $18, the tax agency says.
Why the IRS is paying taxpayers interest
What’s the full story on this mystery money, going to about 13.9 million individual taxpayers? It’s interest owed on tax refunds, the IRS explains.
filed your tax return over those three months and either already got a refund or are expecting one, you’ll receive interest on your refund, too.” data-reactid=”62″ type=”text”>Amid the chaos caused by the COVID-19 pandemic, this year’s tax filing deadline was extended from April 15 to July 15. If you filed your tax return over those three months and either already got a refund or are expecting one, you’ll receive interest on your refund, too.
Officials explain that the interest is a result of the “disaster-related postponement” of this year’s Tax Day, because of the coronavirus.
The law governing disaster-related delays requires the IRS to pay individuals interest on their refunds, starting from the original April 15 deadline. You get no extra cash if you got a refund before April 15 — or if you missed the extended July 15 due date.
Before you start thinking the tax agency is being unusually generous by handing out the interest, here’s a fact that will snap you back to reality: “The 2019 refund interest payments are taxable, and taxpayers must report the interest on their 2020 federal income tax return,” the IRS says. Harsh.
Most of the interest payments are being made separately from tax refunds. About 12 million people will receive their interest via direct deposit, and the other 1.9 million will be mailed checks, says the tax agency.