Millions of taxpayers receive a tax refund interest payment
In mid-August interest payments were sent to nearly 14 million individual taxpayers. People who got these payments filed their 2019 federal income tax returns by the July 15 deadline and were owed refunds.
These interest payments averaged about $18. The IRS issued most of the payments separately from tax refunds.
Most taxpayers who received their refund by direct deposit had their interest payment sent to the same account. Everyone else received a check. A note on the check reads “INT Amount.” This identifies it as a refund interest payment.
These interest payments are taxable. Taxpayers who received a payment must report it on their 2020 federal income tax return next year. The IRS will send a Form 1099-INT in January 2021, to anyone who gets a payment of at least $10.
This interest payment is due to the IRS postponing this year’s filing deadline to July 15. The new deadline was related to COVID-19 and is considered a disaster-related postponement. Therefore, the law requires the IRS to pay interest calculated from the original April filing deadline. The taxpayer must have filed their 2019 federal income taxes by the July 15, 2020, deadline to get an interest payment.
This refund interest only applies to individual taxpayers. Businesses aren’t eligible.
Visit IRS.gov for details on how the interest payments are figured.
Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona. With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting. We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors). Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.