IRS Interest paid to the tax payer

Forum|Forum|6 years ago
July 12, 2020
1 reply
7 views

I am wondering how to calculate the interest I will receive on my tax return. My tax return is 3 months overdue due to COVID and I've heard the IRS is paying interest, but from the articles I've read, I'm unsure of how they calculate it.

I read that 3rd Quarter interest rate is 5%

Is this calculated per day? Is it per annum?

I'm so confused on how it's figured.

Just as an example, say I'm receiving $1500 refund.

Do I take 1500 x .05 and the $75 is my total interest paid?

Or is it per day that its overdue? so like $75 per day in interest?

Or maybe neither one of these is right?

Can someone break this down for me?

Not A Product Question

fanfare

Level 15

I would worry instead how you will pay the income tax on that taxable interest from US Treasury.

CourtneyzietzAuthor

Level 2

I'm not to worried about this. Just wondering how it works.

Anonymous

daily rate would be about .000137 so on a $1000 paid 30 days late you'll be $4 richer. (5%/365 *30*1000). oh you have to pay federal and state taxes on it in 2020