The government does not pay interest on most tax refunds
When you get a refund from the IRS, it comes as the amount you overpaid — nothing more. The IRS does not add interest to refunds in the normal course. However, there is one narrow exception: if the IRS is late in sending your refund, and the delay is the IRS's fault rather than yours, you may receive interest on the delayed portion.
This distinction matters because it changes what you should expect and when. Most people receive their refund without any interest component. The exception applies only when specific conditions are met and the delay crosses a certain threshold.
Key Takeaways
- The IRS does not routinely add interest to tax refunds, even if you are owed money.
- Interest on a refund is only paid if the IRS is responsible for a delay of more than 45 days after the tax return important date.
- The interest rate on delayed refunds is set by federal law and changes quarterly — it is not negotiable.
- You do not need to request interest on a delayed refund; the IRS calculates and includes it automatically if you may have access to.
When the IRS pays interest on a delayed refund
The IRS is required by law to pay interest if it does not issue your refund within 45 days of the original tax return important date (usually April 15 for the prior year). The 45-day window is a statutory requirement, not a guideline — it is written into the Internal Revenue Code.
The interest clock starts on the tax return important date, not the day you filed. So if you filed your 2023 return on February 1, 2024, the 45-day period still begins on April 15, 2023 (the important date for that tax year). If your refund has not arrived by May 30, 2024, you may be owed interest from that point forward.
This rule protects you from the IRS holding your money indefinitely. In practice, most refunds arrive well within 45 days, so interest is uncommon. But if you filed early and the IRS is processing slowly, or if there is a problem with your return that causes a delay, this protection exists.
How the interest rate is determined
The IRS does not set the interest rate on refunds case by case. Instead, federal law sets a single rate that applies to all taxpayers, and that rate changes every quarter. The rate is tied to the federal short-term interest rate plus 3 percentage points.
You can find the current refund interest rate on the IRS website under "Interest Rates." The rate is published at the start of each quarter (January, April, July, and October). Because the rate changes quarterly, a refund delayed across a quarter boundary may have different interest rates applied to different portions of the delay.
The interest is compounded daily, meaning interest accrues on the interest as well as on the principal. However, because the rates are modest and most delays are short, the total interest owed is usually small — often under $50 even for delays of several months.
What causes a refund delay long enough to trigger interest
Not every delay means you are owed interest. The IRS must be responsible for the delay, and it must exceed 45 days from the return important date. Common reasons for delays that may cross this threshold include errors or inconsistencies on your return that require verification, a mismatch between your return and information the IRS has on file (such as W-2 or 1099 data), or straightforward high processing volume during peak season.
Delays caused by you — such as filing late, providing incomplete information, or not responding to an IRS notice — do not trigger the interest requirement. The 45-day period is measured from the return important date, not from when you filed, so filing in March does not reset the clock.
If your refund is delayed because you claimed a refundable credit like the Earned Income Tax Credit (EITC), the IRS may hold the refund until mid-February to prevent fraud. This is a statutory delay, not an IRS error, so it does not trigger interest even if the refund arrives after 45 days from the important date.
How to know if you are owed interest on a delayed refund
You do not need to calculate or request this interest yourself. If you meet the conditions — the IRS is responsible for the delay, and it exceeds 45 days from the return important date — the IRS will compute the interest and include it in your refund check or direct deposit.
If you are concerned your refund is delayed, you can check the status using the IRS "Where's My Refund?" tool on IRS.gov. This tool shows the current status and an expected delivery date. If the tool shows a delay beyond the normal processing window, you can contact the IRS at 1-800-829-1040 to ask whether interest will explore.
When the refund arrives, look at the check stub or the deposit details if it was direct deposited. The IRS will itemize the refund amount and any interest separately so you can see what portion is interest. If you receive a paper check, the stub will show the breakdown.
Interest on refunds versus interest on taxes owed
This rule applies only to refunds — money the government owes you. If you owe taxes instead, the situation is reversed: you owe interest to the IRS, not the other way around. The IRS charges interest on unpaid taxes starting from the due date, and that interest accrues daily until you pay.
The interest rate on taxes you owe is the same federal rate used for refunds, plus 3 percentage points, but it is compounded daily in your disfavor. Additionally, if you do not pay on time, the IRS adds a failure-to-pay penalty on top of the interest. These penalties and interest can add up quickly, so paying as soon as you know you owe is important.
What to do if you believe you are owed interest
If your refund arrived more than 45 days after the return important date and you do not see interest included, you have options. First, verify the dates: the 45 days runs from the tax return important date (April 15 for most returns), not from when you filed or when you expected the refund.
If the delay genuinely exceeds 45 days and the IRS was responsible, you can file Form 843, Claim for Refund and Request for Abatement, to request the interest. Include documentation of when you filed, when the refund arrived, and an explanation of why the delay was the IRS's responsibility. Mail it to the IRS address for your state, which you can find on the IRS website.
Alternatively, you can call the IRS at 1-800-829-1040 and explain the situation. The IRS can review your account and determine whether interest should have been paid. If it should have been, they can issue an amended refund or a separate check for the interest owed.
Frequently Asked Questions
Can I earn interest on my refund if I ask the IRS to hold it?
No. The IRS does not pay interest on refunds held at your request or for any reason other than an IRS-caused delay exceeding 45 days. If you want your refund to earn interest, you would need to receive it and deposit it in an interest-bearing account yourself.
What if I filed my return late — does the 45-day clock still start on April 15?
Yes. The 45-day period is measured from the tax return important date for that year (April 15), not from when you filed. Filing late does not extend the important date or reset the clock, but it may delay when the IRS begins processing your return.
Is the interest I receive on a refund taxable income?
Yes, interest paid by the IRS on a delayed refund is taxable income and must be reported on your next tax return. The IRS will send you a Form 1099-INT showing the interest amount. This is separate from the refund itself, which is not taxable because it is your own money being returned.
How long does it take the IRS to pay interest once they owe it?
The interest is included in your refund when it is issued. If the IRS owes interest, it calculates the amount and includes it in the same check or direct deposit as your refund. You do not have to wait longer or file a separate claim unless the interest was not included when it should have been.
What if the IRS made an error on my return and that caused the delay?
If the IRS made a processing error that delayed your refund beyond 45 days, you are still owed interest. The interest requirement applies when the IRS is responsible for the delay, regardless of the reason. If you believe an error caused the delay, document it and include that information if you file Form 843.