The IRS adds interest to refunds that take longer than 45 days to reach you

When the IRS holds your refund past a certain point, it owes you interest on that money. The interest accrual clock starts on the original due date of your return — usually April 15 — not on the date you filed. If your refund arrives before 45 days have passed since that due date, you receive no interest. If it arrives after 45 days, the IRS calculates interest from day 46 onward until the refund hits your account.

The rate itself is set by law and changes quarterly. The IRS publishes the current rate on its website and in the Federal Register. For 2024, the rate has been 8 percent per year for most of the year, though it can shift. The calculation is straightforward: the IRS multiplies your refund amount by the interest rate, divides by 365, and multiplies by the number of days the refund was delayed past 45 days.

You do not request this interest or fill out a form to receive it. The IRS calculates it automatically and includes it in your refund deposit or check. The interest appears as a separate line item on your refund notice, which you receive by mail after the money arrives.

Key Takeaways

  • Interest starts accruing on day 46 after the original April 15 due date, not from the date you filed your return.
  • The IRS interest rate changes quarterly and is published on the IRS website; it is not the same as credit card or bank interest rates.
  • The calculation uses the daily rate: annual rate divided by 365, multiplied by the number of days delayed, multiplied by your refund amount.
  • You receive the interest automatically as part of your refund; no action is required on your part.

When the 45-day clock starts and stops

The clock begins on the original due date of your tax return, which is April 15 for most filers. This is true even if you filed months earlier. If you filed in February and the IRS processes your return in March, the 45-day window still runs from April 15, not from your filing date. This rule protects filers who file early but have their refunds delayed by the IRS.

The clock stops when the refund is deposited into your bank account or when a check is mailed to you, whichever comes first. If you chose direct deposit, the deposit date is what matters. If you are receiving a paper check, the IRS counts the date the check was mailed, not the date you received it in your mailbox.

In practice, most refunds arrive within 21 days of filing. The 45-day threshold exists to account for processing delays, identity verification holds, and other legitimate reasons the IRS might need extra time. Refunds delayed by errors on your return, missing documents, or fraud investigations may take much longer, but interest still accrues only after day 45.

How to calculate the interest amount yourself

You can work through the math if you want to verify what the IRS owes you. Start with your refund amount. Divide the current IRS interest rate by 365 to get the daily rate. Multiply that daily rate by the number of days your refund was delayed past 45 days. Then multiply by your refund amount.

Example: You are owed a $2,000 refund. The IRS interest rate is 8 percent per year. Your refund arrives 60 days after April 15, which is 15 days past the 45-day threshold.

Daily rate: 8 ÷ 365 = 0.0219 percent per day Interest owed: 0.000219 × 15 days × $2,000 = $6.57

The IRS will include $6.57 in your refund along with the $2,000. The actual interest you receive may differ slightly due to rounding or if the rate changed during the delay period. If your refund was delayed across a quarter when the rate changed, the IRS calculates interest in two parts: the first portion at the old rate, the second at the new rate.

Why refunds get delayed past 45 days

The most common reason is volume. During peak filing season in March and April, the IRS processes millions of returns. Even with automation, some refunds straightforward take longer to move through the system. A return that arrives in early April may not be processed until late May, pushing it well past 45 days.

Identity verification holds are another major cause. If the IRS flags your return for potential fraud or identity theft, it freezes the refund while it confirms you are who you say you are. This can add weeks or months. You will receive a notice asking you to verify information by phone or mail. Until you respond, the refund does not move.

Errors on your return also trigger delays. If you reported conflicting information — a Social Security number that does not match your name, income that does not align with W-2s or 1099s, or a dependent claimed by two filers — the IRS stops processing and sends you a notice. You have to correct the error and resubmit before processing resumes.

Amended returns take longer than original returns. If you filed an amended return (Form 1040-X) to correct something, expect 16 weeks or more for processing, which almost always means interest accrues.

The IRS interest rate and how it changes

Congress sets the formula for the IRS interest rate, and it is tied to the federal short-term rate. The rate is recalculated every quarter — January, April, July, and October — and rounded up to the nearest whole percent. The IRS publishes the new rate in the Federal Register and on its website.

The rate has ranged from 3 percent to 8 percent in recent years, depending on broader economic conditions. During the pandemic, it dropped to 3 percent. As of 2024, it has been 8 percent. You can find the current rate and historical rates on the IRS website under "Interest Rates".

The IRS interest rate is separate from the penalty interest rate, which applies if you owe taxes and pay late. The refund interest rate is also different from the underpayment rate, which applies to estimated tax payments. Do not confuse these three rates; they are calculated differently and explore to different situations.

What you will see on your refund notice

After your refund is processed, the IRS mails you a notice that breaks down the refund amount and any interest. The notice shows your original refund, the interest amount, and the total. It also shows the dates used in the calculation — the due date, the processing date, and the number of days delayed.

If you received direct deposit, the interest is included in the deposit amount. You will not see it as a separate deposit; it is all one transfer. If you received a paper check, the check amount includes both the refund and the interest.

Keep this notice for your records. If you have questions about the calculation or believe the IRS made an error, you can contact the IRS with the notice in hand. The notice includes a phone number and instructions for reaching the right department.

Frequently Asked Questions

Does interest accrue if I filed my return late?

No. The 45-day clock runs from the original due date of your return (April 15), not from when you filed. If you filed in June but the IRS did not process your refund until August, interest still starts on day 46 after April 15, not day 46 after your filing date. Filing late does not change when interest begins.

What if the IRS interest rate changed while my refund was delayed?

The IRS calculates interest in two parts. The first part uses the rate that was in effect when the delay began. The second part uses the new rate from the quarter when the rate changed. You will see both amounts on your refund notice, though they are usually combined into a single interest line.

Can I claim the interest as income on next year's return?

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

What if my refund was delayed because I made an error?

You still receive interest. The reason for the delay does not matter. Whether the IRS delayed your refund due to its own processing backlog, identity verification, or an error you made on your return, interest accrues the same way after 45 days.

How do I know if my refund qualifies for interest?

Check your refund notice. If the refund arrived more than 45 days after April 15, the notice will show an interest amount. If no interest appears, your refund arrived within the 45-day window and no interest was owed.