Wednesday, May 25

IRS Tax Refunds: Why are some taxpayers getting $121 extra payments?

The deadline to file your 2021 taxes in the United States was almost a month ago, back on April 18, 2022, but there are still millions of Americans who are waiting for their tax refund to arrive.

Some of these individuals will have filed months ago but still found themselves in the same position as those who filed late, as they are anticipating the arrival of their tax refund.

Although this can be understandably frustrating, there can be a benefit to receiving your tax refund late.

Why are some taxpayers getting $121 extra payments?

The good news for taxpayers is that the Internal Revenue Service (IRS) is legally obliged to pay interest on refunds that have not been processed inside 45 days of the return being received.

In 2021, for example, the IRS had to pay out 3.3 billion dollars to taxpayers in interest, while on April 29, 2022, there were still 9.6 million returns that had not yet been processed.

Some of the reasons behind the delays is that the laws regarding stimulus checks and child tax credit payments have caused a bit of confusion, leading to returns taking longer to process.

Should you be waiting for a period longer than the aforementioned 45 days, the interest you will get for your tax refund is decided by the federal short-term rate, as well as an extra three percent.

In each quarter of the year the rate is set, and on April 1, 2022, the rate stood at four percent.

Therefore, in the event someone is waiting for a tax refund worth 3,019 dollars – the average pay-out this year – there could be an extra 120.76 dollars added on top in interest.

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In order to track the progress of your tax refund, you can use the ‘Where’s My Refund?‘ tool on the IRS‘ website.

Source

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