FORT WAYNE, Ind. (WANE) — Millions of taxpayers are still waiting for their tax refunds, but the wait might be worth it.
The Internal Revenue Service (IRS) says that the late refunds are due to the pandemic and is hoping to have the returns for 2020 done before the next tax season. For those waiting on their refunds, they might get more than they expect.
“The IRS will pay interest on late returns,” said Linda Troyer, Tax Pro from Jackson Hewitt. “It’s not much but it is something that will be a nice chunk for those who’ve been waiting.”
At 16 weeks, without a tax return, the IRS will start paying interest. That interest collects until the return is sent back to the taxpayer. That refund is not taxable and doesn’t have to be claimed. That means any interest is tax-free.
“Again it’s not a lot but it’s a nice little incentive for the IRS to get the returns out in a timely fashion,” Troyer said. “I just got a call today from someone who’s still waiting but is starting to collect interest. But it’s still difficult because he needs that refund.”
You will get an interest payment either directly deposited into your account or by a paper check from the IRS for your late tax return. However, businesses are not eligible for interest payments.
“It’s not just the IRS who’s behind,” Troyer said. “There are a lot of companies who are short-staffed and are having trouble getting all of their documents in order. So it’s never too early to get organized and start getting ready for 2021 taxes.”
If you haven’t received your tax refund, Troyer says the best time to contact the IRS is early in the morning. You can reach out to the IRS by calling 800-829-1040 or by clicking here.