The IRS pays interest on refunds delayed beyond 45 days
If the IRS holds your refund longer than 45 days from the date you filed your return, it must pay you interest on the amount owed. This is not something you request — the IRS calculates and adds it automatically. The interest rate changes every three months and is set by federal law, not by the IRS.
For 2024, the interest rate on federal tax refunds is 8 percent per year, compounded daily. This rate applies to refunds delayed from April 1 through June 30, 2024. The rate was 7 percent for the first quarter of 2024 and may change again in the third quarter. The IRS publishes the current rate on its website and updates it on the first day of each quarter.
Interest accrues from the original due date of your return (usually April 15) until the IRS issues your refund, not from the date you filed. If you file early and the IRS delays payment, you still earn interest from April 15 forward.
Key Takeaways
- The IRS pays interest automatically on any refund delayed past 45 days from your filing date, with no action required on your part.
- The interest rate is set by federal law and changes quarterly — it was 8 percent for April through June 2024 but may differ in other periods.
- Interest is calculated from your return's original due date (April 15 for most filers) to the date the IRS issues your refund, compounded daily.
- You receive the interest as part of your refund check or direct deposit; the IRS does not send it separately.
- The amount of interest on most refunds is small — a $2,000 refund delayed 60 days at 8 percent annual interest earns roughly $26.
How the IRS calculates the interest amount
The calculation is straightforward: the IRS multiplies your refund amount by the interest rate, then divides by 365 to get a daily rate, then multiplies by the number of days the refund was delayed. Because interest compounds daily, each day's interest earns interest on top of it.
The IRS does not round down or cap the interest. A refund of $5,000 delayed 90 days at 8 percent annual interest earns approximately $98. The exact amount depends on the precise number of days between your filing date and the refund issue date, which you can see on your refund status page or in your bank records.
You do not need to calculate this yourself. The IRS includes the interest in the total amount it sends you. If you receive a refund check, the check amount includes interest. If you receive a direct deposit, the deposited amount includes interest. The IRS does not itemize interest separately on most notices.
When you will actually receive the interest
The interest arrives as part of your refund, not in a separate payment. If the IRS issues your refund by direct deposit, the interest is included in that deposit. If you receive a paper check, the check amount includes interest. There is no separate interest check or payment.
The timing depends on how the IRS issues your refund. Direct deposits typically arrive within one to three business days after the IRS releases the refund. Paper checks take seven to ten business days to arrive by mail. The interest is calculated through the date the IRS issues the refund, not the date you receive it.
Why refunds are delayed past 45 days
The most common reason is that your return requires manual review. This happens when the IRS detects a mismatch between your reported income and what employers or financial institutions reported to the IRS, or when you claim certain credits like the Earned Income Tax Credit that the IRS verifies more carefully.
Other delays occur when you file on paper instead of electronically, when your return contains errors that require correction, or when you claim a refund offset (meaning the IRS withholds part of your refund to pay a past-due debt like student loans or child support). Identity theft investigations also cause delays, as does a backlog during peak filing season.
If your refund is delayed, you can check the status using the IRS "Where's My Refund?" tool on IRS.gov. This tool updates once per day and shows whether your return is still being processed, whether the IRS has approved your refund, or whether there is a problem holding up payment.
Interest rates by quarter and year
The IRS sets the interest rate based on the federal short-term rate plus 3 percentage points. Because the federal rate changes, the IRS rate changes too. Here are the recent rates:
| Period | Interest Rate |
|---|---|
| January 1 – March 31, 2024 | 7% |
| April 1 – June 30, 2024 | 8% |
| July 1 – September 30, 2024 | 8% |
| October 1 – December 31, 2023 | 8% |
The rate for the current quarter is always posted on the IRS website under "Interest Rates." If your refund spans two quarters — for example, if the IRS approves it in late May and issues it in early July — the interest is calculated using the rate for each period separately, then combined.
What to do if you do not see the interest in your refund
First, confirm that your refund was actually delayed past 45 days. Count from the date you filed your return to the date the IRS issued the refund (shown in "Where's My Refund?" or on your bank deposit). If the delay was 45 days or less, no interest is owed.
If the delay was longer than 45 days and you do not see interest added to your refund amount, contact the IRS at 1-800-829-1040. Have your Social Security number, filing status, and the refund amount ready. The IRS can tell you whether interest was calculated and, if so, why it may not appear on your notice.
Interest disputes are rare because the calculation is automatic. If the IRS made an error, it will issue a corrected refund or a separate check for the missing interest. This process typically takes four to six weeks.
Frequently Asked Questions
Do I have to pay taxes on the interest the IRS pays me?
No. Interest paid by the IRS on a tax refund is not taxable income. You do not report it on your next year's return, and the IRS does not send you a 1099 form for it. This is one of the few types of interest that is tax-free.
Can I claim a refund if the IRS does not pay interest on a delayed refund?
You cannot sue the IRS for interest owed on a refund, but you can file a complaint with the Treasury Inspector General for Tax Administration (TIGTA) if you believe the IRS failed to pay interest it was required to pay. This is a formal process and rarely results in payment, but it creates a record of the error.
What if my refund was delayed because I made a mistake on my return?
You still receive interest if the delay exceeded 45 days, even if the delay was caused by an error you made. The IRS pays interest on all refunds delayed past 45 days, regardless of the reason for the delay.
Does the interest rate apply to state tax refunds too?
No. State tax refunds are governed by state law, not federal law. Each state sets its own interest rate and rules about when interest is paid. Some states pay interest on delayed refunds; others do not. Contact your state tax agency to learn the rules in your state.