Tax Refund Interest Payments
IF YOU RECEIVED A refund check from the IRS for filing your 2019 federal income tax returns, and you also received a stimulus check earlier this year, you may soon be three for three.
Why Haven’t I Received a Stimulus Check?
That is, you may soon get the interest you are owed for receiving your federal tax refund later than usual. So if your interest on this interest is piqued, here are some answers to questions about when and how this money may arrive.
I might get a check for the interest owed to me for my tax refund? Why is this happening?
It’s related to the pandemic. You may get a tax refund interest payment check if your refund check came to you after April 15, which may well be the case. As you are probably well aware, the normal April 15 tax deadline was extended to July 15 due to the pandemic and its lockdowns.
What’s the worst that can happen if I forget to report a small direct deposit from the IRS?
Rafael Alvarez, CEO of ATAX, a national tax preparation and business services franchise says that if the IRS discovers that you didn’t report your IRS refund interest money and recalculates your taxes, if the money you made that year increases, as unlikely as it sounds, you could wind up in a higher tax bracket. And then suddenly you owe more taxes than you thought you did, and you receive a letter from the IRS, asking you to pay up.
Alvarez is one of those better-be-safe-than-sorry people. “I prefer to report everything rather than leave it out,” he says.
What do I need to know about reporting my IRS refund interest money on my federal taxes?
In January, you’ll receive Form 1099-INT from the IRS, assuming your interest is at least $10. File that form when you submit your federal taxes. If your direct deposit or check for your interest is less than $10 (and you don’t receive a Form 1099-INT), write a note or put a reminder on your phone to let you know that you need to report this money.