The IRS pays interest on refunds that arrive late, but the rate is low and changes quarterly

If the IRS owes you money and takes longer than 45 days to send it, they must pay you interest on the delayed amount. 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 lower in previous years and may change again in 2025.

The catch: you do not receive this interest automatically. The IRS calculates it only if your refund is genuinely late—meaning more than 45 days have passed since you filed your return or since the tax important date (April 15), whichever is later. If you filed in February and received your refund in March, no interest applies. If you filed on time and the IRS sent your refund in July, interest accrues from day 46 onward.

The interest amount is usually small. On a $2,000 refund delayed 90 days at 8 percent annual interest, you would receive roughly $39 in interest. The IRS includes this interest on the check or deposit itself—you do not claim it separately on a future tax return.

Key Takeaways

  • Interest accrues only if your refund arrives more than 45 days after you filed or after the tax important date, whichever is later.
  • The interest rate is set by the IRS quarterly and was 8 percent annually in 2024; check IRS.gov for the current quarter's rate.
  • The IRS calculates and includes interest automatically on delayed refunds—you do not need to request it or file a claim.
  • Interest is paid on the full refund amount from day 46 of the delay forward, compounded daily.

How the IRS calculates the interest amount

The IRS uses a daily compounding formula. The interest rate is divided by 365, then multiplied by your refund amount, then multiplied by the number of days the refund was late. This happens automatically in the IRS system—you will see the interest included in your refund check or direct deposit, often as a separate line item on the notice that accompanies it.

The 45-day clock starts on the later of two dates: the date you filed your return, or April 15 of that tax year. If you filed your 2023 return on March 1, 2024, the clock starts March 1. If you filed on May 10, the clock still starts April 15 (the tax important date). Once 45 days pass from that date, every additional day of delay generates interest at the quarterly rate.

You will receive a notice (usually Form 1040-V or a letter) that breaks down your refund amount and the interest separately. Keep this notice for your records, because the interest is taxable income in the year you receive it—though the amount is usually small enough that it does not change your tax situation.

When refunds are delayed and interest actually accrues

Most refunds arrive within 21 days of filing electronically, so interest rarely applies. Delays happen when the IRS needs to verify information on your return, when you claim certain credits (like the Earned Income Tax Credit), or when the IRS is processing a high volume of returns during peak season.

If you filed on paper instead of electronically, the 21-day timeline extends to several weeks just for the IRS to scan and process your return. Paper filers often do not see refunds until May or June, which can push them past the 45-day threshold.

Amended returns (Form 1040-X) have their own timeline. Interest on an amended return refund starts 45 days after you file the amended return, not after you filed the original. If you filed an amended return in September and received the refund in December, interest would accrue from late October onward.

The quarterly interest rate and how it changes

The IRS sets the interest rate based on the federal short-term rate plus 3 percentage points. This rate changes on January 1, April 1, July 1, and October 1 each year. The rate for each quarter is published on IRS.gov, usually a few days before the quarter begins.

Recent rates have been: 8 percent (2024), 8 percent (2023), 6 percent (2022), 3 percent (2021), and 3 percent (2020). The rate was much lower during the pandemic and has climbed as federal interest rates rose. If your refund was delayed across a quarter boundary—for example, from March into April—the IRS applies the old rate to days in the old quarter and the new rate to days in the new quarter.

You can find the current and historical rates on the IRS website under "Interest Rates." If you want to calculate your own interest to verify the amount the IRS sent, you will need the exact dates and the rates for each quarter your refund was delayed.

What to do if you do not see interest on a late refund

If your refund arrived more than 45 days after you filed and you did not receive interest, contact the IRS directly. You can call 1-800-829-1040 (the main IRS line) and ask to speak with someone about interest on a delayed refund. Have your Social Security number, the tax year, and the date you filed ready.

The IRS does not always catch every delayed refund automatically, especially if your return was flagged for review or amended. If you can show that your refund was genuinely late, the IRS can recalculate and send you the interest owed, usually within a few weeks.

If the IRS disputes that your refund was late, ask them to show you the date they received your return and the date they issued the refund. The 45-day rule is clear in the tax code, so if the dates support your claim, they should pay the interest.

Interest on refunds from amended returns and prior-year claims

If you file an amended return (Form 1040-X) and are owed a refund, the 45-day clock resets. Interest accrues 45 days after the IRS receives your amended return, not from the original filing date. Amended returns often take longer to process than original returns, so delays are common.

If you file a claim for a refund from a prior tax year—for example, claiming a credit you missed on your 2020 return in 2024—the IRS has three years to process it. Interest accrues 45 days after they receive your claim. These older claims often move slowly through the system, so interest can add up over several months.

Frequently Asked Questions

Do I have to pay taxes on the interest the IRS sends me?

Yes. Interest paid by the IRS on a tax refund is taxable income in the year you receive it. The IRS will send you a Form 1099-INT if the interest is $10 or more. You report it on your next tax return as interest income, though the amount is usually small.

What if I filed my return late—does the 45-day clock still start on April 15?

No. The 45-day clock starts on the date you actually filed your return, not the tax important date. If you filed in July, the clock starts in July. This means late filers can still earn interest if the IRS takes more than 45 days to process and send the refund.

Can I request a faster refund to avoid waiting for interest?

No. The IRS processes refunds in the order they are received, and you cannot jump the queue. The only way to get a refund faster is to file electronically with direct deposit, which is the standard 21-day timeline. Interest is the IRS's way of compensating you for delays beyond that window.

What if the IRS made an error and my refund was actually on time?

Contact the IRS with proof of when you filed and when the refund was issued. If the IRS agrees the refund was on time, they will not include interest. If they included interest by mistake, they can adjust it on a future refund or send you a separate check.

Does interest accrue differently if I get my refund by check versus direct deposit?

No. Interest accrues based on when the IRS processes and issues the refund, not on the method of delivery. A check mailed on day 50 and a direct deposit on day 50 both earn interest from day 46 onward, even if the check takes a week to arrive in your mailbox.