Several of our clients have received a check from the US Treasury that they did not expect. Generally, these are interest payments on refunds triggered by filing a return with a refund in June or July 2020 for 2019 tax year. Here’s why.
Basically, the IRS is mandated to pay interest on tax refunds issued 45 days after the “normal” April 15, 2020 due date. So even though the 2019 due date was moved to July 15. refunds issued after June 1 are technically late with interest accruing back to the April 15, 2020.
Most of these checks will be fairly small in amount with the average being less than $20. This interest income will be taxable on your 2020 tax return. If your original refund was direct deposited, the interest payment will be direct deposited as well.
Please note that the check will include a note on the bottom of it and next to the Statue of Liberty image that will indicate this is an interest payment. As always, if something doesn’t look correct, don’t hesitate to reach out and ask us.
If you’d like to read about this from the source here is the link to the IRS release: IRS Tax Refund Interest
And the IRS info sheet: IRS Interest Info Sheet