Many individual taxpayers who filed 2019 tax returns with refunds due to them will receive interest on their refund from the IRS. The regular April 15 due date for filing returns and paying income taxes was postponed to July 15, 2020, as part of the IRS response to the COVID-19 pandemic. The IRS is required by law to pay interest on tax refunds due to individual taxpayers affected by the federally declared disaster who filed their Federal tax returns for 2019 on or before the postponed due date of July 15, 2020. The interest will generally accrue from the due date of the return, usually April 15th, but this year it was July 15th.
Usually, the IRS pays interest on a refund if the refund is issued after a statutory 45-day period after the due date of the return. Because of the presidentially-declared disaster (Corona Virus), this rule does not apply this year.
This interest payment by the IRS does NOT apply to the stimulus payments that were issued to taxpayers earlier this year. Business entities are not eligible to receive interest on refunds.
Interest payments will average about $18 per taxpayer. Individuals who filed a 2019 return by the July 15, 2020 postponed filing deadline and have already received a refund will receive their interest payment separately.
The interest rate fluctuates quarterly, and is currently about 5% compounded daily.