The IRS does not pay interest on most tax refunds, but it will pay you interest if your refund is delayed beyond a certain point
When you get a refund because you overpaid your taxes, the IRS sends you that money without adding interest. The refund itself is straightforward the return of your own money. However, if the IRS takes longer than 45 days to process your return and send the refund, federal law requires them to pay you interest on the delayed portion. This interest accrues from the original due date of your return (usually April 15) until the date the IRS issues the refund.
The interest rate the IRS pays is set by law and changes quarterly. It is always the same rate that the IRS charges on unpaid taxes, and it is tied to the federal short-term rate plus 3 percentage points. For the first quarter of 2024, the rate was 8 percent per year. The rate changes on January 1, April 1, July 1, and October 1 each year, so the rate that applies depends on when your refund was actually issued.
Key Takeaways
- The IRS pays interest only when a refund is delayed more than 45 days after the tax return's due date, not on all refunds.
- The interest rate changes quarterly and is set by federal law; you cannot negotiate it or choose a different rate.
- Interest is calculated from the original due date of your return (usually April 15) to the date your refund is issued.
- You do not need to request interest or file a separate claim; the IRS calculates and includes it automatically if you may have access to.
- Most refunds processed within 21 days do not may have access to for interest, even if they arrive after 45 days from the filing important date.
When the 45-day clock starts and stops
The 45-day period begins on the due date of your return, not the date you filed it. For most people filing a 1040, that due date is April 15. If you filed an extension, the due date moves to October 15. The clock stops on the date the IRS actually issues your refund—the date they send it to your bank account or mail a check, not the date you receive it.
If you file your return on April 1 and the IRS issues your refund on May 10, that is only 39 days from the due date, so no interest is owed. If you file on March 1 and the IRS issues the refund on June 1, that is 47 days from April 15, so interest accrues for 2 days. The filing date does not matter; only the due date and the issue date matter.
How the IRS calculates the interest amount
The IRS uses a daily compounding formula. The interest rate is divided by 365 to get a daily rate, then applied to your refund amount for each day the refund is delayed past 45 days. The calculation is automatic; you will see the interest amount on the check or deposit notice the IRS sends you.
For example, if your refund is $3,000 and it is delayed 60 days past the due date, and the interest rate for that quarter is 8 percent, the IRS will calculate interest for 15 days (60 minus 45) at the daily rate. The actual dollar amount is usually modest—often between $5 and $50 for typical refunds—but it is real money the IRS owes you.
Why most refunds do not trigger interest payments
The IRS processes most returns within 21 days if you file electronically and choose direct deposit. Even if you file on April 15, a 21-day processing time means your refund arrives by early May, well before the 45-day threshold. You would have to experience a significant delay—a return that sits in queue, requires manual review, or gets flagged for verification—to cross the 45-day line.
Returns filed by mail take longer to process, sometimes 4 to 6 weeks just to be scanned and entered into the system. If you mail your return and it arrives late, or if the IRS requests additional documents, the delay can easily push past 45 days. In those cases, interest accrues automatically.
The quarterly interest rate schedule
The IRS publishes the interest rate for each quarter in advance. The rates for 2024 were:
| Quarter | Interest Rate |
|---|---|
| January 1 – March 31 | 8% |
| April 1 – June 30 | 8% |
| July 1 – September 30 | 8% |
| October 1 – December 31 | 7% |
The rate that applies to your refund is the one in effect during the quarter in which the IRS issues your refund. If your refund is issued on June 20, the April–June rate applies. If it is issued on July 5, the July–September rate applies. You can find the current and historical rates on the IRS website under "Interest Rates."
What to do if you believe your refund was delayed
If you filed your return more than 45 days before receiving your refund, check the notice or deposit confirmation the IRS sent. It will show the issue date and any interest amount included. If the IRS issued your refund more than 45 days after the due date and no interest appears on the notice, contact the IRS at 1-800-829-1040 to ask them to recalculate.
Keep records of when you filed, when the IRS acknowledged receipt (if you have a confirmation number), and when you received the refund. If the IRS made an error in calculating the interest, they can issue a corrected notice or an additional payment. Do not expect a large amount—the interest is calculated daily and compounds, but the total is usually small unless the refund was very large or the delay was very long.
Frequently Asked Questions
Can I earn interest on my refund if I ask the IRS to hold it?
No. Interest only accrues if the IRS delays issuing the refund, not if you delay requesting it or ask them to hold it. The 45-day clock starts on the due date of your return, regardless of when you filed.
Does the interest rate change if my refund is delayed into the next quarter?
Yes. If your refund is issued on June 30, the April–June rate applies to the entire delay. If it is issued on July 1, the July–September rate applies. The rate in effect on the issue date is what matters.
What if I filed an extension—does the 45-day clock change?
Yes. If you filed an extension, your return's due date becomes October 15, not April 15. The 45-day period runs from October 15. Interest accrues only if the IRS takes more than 45 days from October 15 to issue your refund.
Is the interest I receive from the IRS 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 if the interest exceeds $10.
What if the IRS made an error and my refund was delayed because of it?
The interest is still owed to you. The IRS pays interest on delayed refunds regardless of the reason for the delay. If you believe the delay was due to an IRS error, you can file a complaint with the Taxpayer Advocate Service, but the interest payment itself is separate from any other remedy.