Interest Payments For On-Time Tax Filers
Aug 19, 2020
Nearly 14 million Americans will receive an interest payment check from the IRS sometime this week. Here’s what you need to know:
Due to the recent pandemic, this year’s tax filing deadline was pushed back to July 15 which is considered “disaster-related postponement.” As a result, the IRS, by law, must pay interest calculated from the original April 15 filing deadline to anyone who filed their individual return by the postponed deadline. Please note, businesses do not qualify for an interest payment.
What does this mean for me?
If you met the July 15 tax deadline and either received a refund in the past three months or anticipate receiving a refund, you will be receiving an interest payment! Funds will be directly deposited into the same bank account your tax refund was deposited otherwise you will be receiving a check in the mail. The amount of Interest is paid at rates set by law with the average payment being $18.
What is the taxability of these payments?
You must report the interest as taxable income on your 2020 federal income tax return you will file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10.
If you have questions regarding your interest payment check, please contact your William Vaughan Company advisor or contact us at 419.891.1040. We’d be happy to help!
Categories: COVID-19, Tax Planning