The IRS pays interest on refunds delayed beyond 45 days, but the rate is low and changes quarterly

If the IRS holds your refund longer than 45 days from the date you filed, it owes you interest on the amount owed. The interest rate is set by federal law and recalculates every three months. For 2024, the rate is 8 percent per year, but it was 7 percent in 2023 and 6 percent in 2022. The rate moves with changes to the federal short-term interest rate, so it varies year to year.

Interest accrues daily from the original due date of your return (usually April 15) until the IRS issues your refund. The IRS calculates it in daily increments and rounds down to the nearest dollar. Most refunds arrive within 21 days of filing electronically, so most people never receive interest. You only get it if processing takes longer than 45 days.

You do not have to do anything to receive the interest—the IRS adds it automatically to your refund check or deposit. You will see it listed separately on the notice that comes with your refund.

Key Takeaways

  • Interest is paid only if your refund is delayed more than 45 days from your filing date, and the rate changes quarterly based on federal rates.
  • The interest accrues daily from the original tax return due date (April 15 for most people) until the IRS sends your money.
  • Most electronic refunds arrive within 21 days, so interest is rare unless the IRS flags your return for review or verification.
  • The IRS pays the interest automatically; you do not need to request it or file a separate claim.

When the 45-day clock starts and stops

The 45-day period begins on the date you filed your return, not the date you mailed it or the tax important date. If you file electronically on March 10, the clock starts March 10. If you file on paper and mail it April 1, the clock starts April 1. The IRS counts calendar days, including weekends and holidays.

The clock stops on the date the IRS issues your refund. For direct deposit, that is the date the money enters your bank account. For a paper check, it is the date the check is mailed. The IRS notice that arrives with your refund will show both dates so you can verify the calculation yourself.

If you file before April 15 and the IRS delays processing, interest still runs from April 15 (the original due date), not from your filing date. This is a key detail: the interest period is always measured from the tax year's due date, not when you filed.

How the IRS calculates the dollar amount

The formula is straightforward: refund amount × annual interest rate ÷ 365 × number of days delayed. If you are owed $2,000 and the rate is 8 percent and the delay is 60 days, the calculation is $2,000 × 0.08 ÷ 365 × 60 = $26.30. The IRS rounds down to $26.

The interest is computed on the full refund amount from day 46 onward. If the IRS issues part of your refund early and the rest later, interest applies only to the portion that was delayed. This rarely happens, but it can occur if the IRS processes one part of your return and holds another part for verification.

The IRS publishes the interest rate for each quarter on its website. The rates for 2024 were 8 percent (January–March), 8 percent (April–June), 8 percent (July–September), and 8 percent (October–December). Rates change on the first day of each quarter, so if your refund spans a quarter boundary, the IRS applies the rate that was in effect for each day of the delay.

Why most refunds do not earn interest

The IRS processes most electronic returns within 21 days. The 45-day threshold exists to account for returns that require manual review, verification of identity, or correction of errors. A return flagged for review might take 30 to 60 days. A return with a math error or missing information might take longer.

Paper returns take longer than electronic ones. The IRS must scan and process them manually, which can add 2 to 4 weeks to the timeline. Even so, most paper returns are processed within 45 days unless they contain errors or require verification.

Returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) are held until mid-February by law, regardless of filing date. If you file in January and claim these credits, your refund will not be issued before February 15. Interest accrues from that date forward if the refund is delayed beyond 45 days from your filing date.

What delays refunds past 45 days

Identity verification is the most common cause. The IRS uses automated systems to flag returns that match patterns associated with fraud or identity theft. If flagged, you receive a notice asking you to verify your identity by phone or through an online portal. This process can take 2 to 4 weeks, pushing the refund past the 45-day mark.

Errors on the return also delay processing. A missing Social Security number, a name that does not match IRS records, or a math error will trigger a hold. The IRS corrects straightforward errors and reprocesses the return, which adds time. If you made the error, you may receive a notice asking you to confirm the correction before the refund is issued.

Amended returns (Form 1040-X) are processed more slowly than original returns. The IRS typically takes 16 weeks to process an amended return, so if you file an amended return, interest will almost certainly accrue. The interest runs from the original due date of the tax year, not from the date you filed the amendment.

Offsets also delay refunds. If you owe back taxes, child support, or student loans, the IRS can redirect your refund to pay those debts. The offset process can add 2 to 3 months to the timeline, and interest accrues during that period.

How to track your refund and estimate interest

Use the IRS "Where's My Refund?" tool on IRS.gov to see the current status and estimated delivery date. The tool updates every 24 hours and shows the date the IRS received your return and the date it expects to issue your refund. If the expected date is more than 45 days from your filing date, you can estimate the interest using the formula above.

If your refund is delayed, the IRS will send you a notice explaining why. The notice will include the expected resolution date. Keep this notice—it documents the delay and the reason, which is useful if you need to follow up.

If you believe your refund was delayed unreasonably, you can contact the IRS Taxpayer Advocate Service. The Advocate can investigate delays and may be able to expedite processing. The Advocate does not may provide interest, but it can help resolve underlying issues that caused the delay.

Interest on refunds versus interest on taxes owed

The interest the IRS pays on refunds is different from the interest you pay on taxes owed. When you owe taxes, the IRS charges interest at a higher rate—currently 8 percent per year, but it can be higher in other years. The IRS also charges a failure-to-pay penalty of 0.5 percent per month on top of interest.

Refund interest is simpler: it is interest only, with no penalty. The rate is the same as the rate on taxes owed, but it applies only to the refund amount and only if the delay exceeds 45 days. You cannot reduce refund interest or negotiate it away.

Frequently Asked Questions

Do I have to report the interest as income on next year's tax return?

No. Interest paid by the IRS on a refund is not taxable income. You do not report it on your next return, and the IRS does not send you a Form 1099 for it. The interest is straightforward part of your refund.

What if I filed my return in February but the IRS did not issue it until August?

Interest runs from April 15 (the original due date), not from your February filing date. So the delay is measured from April 15 to the August issuance date. If that is more than 45 days, you receive interest on the full refund amount for the days beyond 45.

Can I get interest if I file an amended return and it takes months to process?

Yes. Interest accrues on amended returns if processing takes more than 45 days from the filing date of the amendment. Because amended returns typically take 16 weeks, interest is almost always owed. The interest runs from the original due date of the tax year, not from the amendment filing date.

What if the IRS applied my refund to back taxes I owe?

Interest still accrues during the offset period. The IRS calculates interest from the original due date until the offset is complete. You will see the interest added to your account, and it may reduce the amount of the offset or be applied to future tax liability.

Is the interest rate the same every year?

No. The rate changes quarterly and is tied to the federal short-term interest rate set by the Treasury. The rate for 2024 was 8 percent all year, but in 2023 it was 7 percent and in 2022 it was 6 percent. The IRS publishes the rate for each quarter on its website.