The IRS adds interest to refunds delayed beyond 45 days

If the IRS takes longer than 45 days to send your refund after you file, federal law requires them to pay you interest on the delayed amount. The interest rate changes quarterly and is set by the IRS based on the federal short-term rate plus 3 percentage points. For the first quarter of 2024, the rate was 8 percent per year; it varies each quarter, so the rate that applies to your refund depends on when the delay occurred.

You do not request this interest or take any action to receive it. The IRS calculates it automatically and includes it in your refund check or direct deposit. The calculation is straightforward: the IRS multiplies your refund amount by the interest rate, divides by 365 days, then multiplies by the number of days the refund was delayed past the 45-day mark.

Most refunds arrive within 21 days of filing electronically, so most people never see interest. Interest becomes relevant only when processing takes significantly longer—usually because of errors on your return, missing documents, identity verification delays, or a backlog at the IRS.

Key Takeaways

  • The IRS pays interest only on refunds delayed more than 45 days after you file, calculated at a rate that changes each quarter.
  • The interest rate for 2024 ranged from 8 percent to 9 percent annually, depending on the quarter in which your delay occurred.
  • You receive interest automatically with your refund; you do not need to claim it or file a separate form.
  • The calculation uses the number of days past 45 that your refund was delayed, multiplied by your refund amount and the applicable quarterly rate.

How the IRS sets the interest rate each quarter

The IRS publishes a new interest rate every three months. The rate is the federal short-term rate (set by the U.S. Treasury based on market conditions) plus 3 percentage points. This means the rate moves up and down with broader economic conditions, not with individual circumstances.

The rate that applies to your refund is the one in effect during the quarter in which your delay occurred. If your return was filed in January but the IRS did not send your refund until June, the interest is calculated using the rates for each quarter that passed—January through March at one rate, April through June at another. The IRS does not use a single rate for the entire delay; it breaks the calculation into quarters.

You can find the current and historical rates on the IRS website under "Interest Rates." The rates are published in the Internal Revenue Bulletin, usually in the first week of each quarter. As of early 2024, rates ranged from 8 percent to 9 percent per year, but this changes regularly.

The math: working through a real example

Suppose you filed your return on February 15 and the IRS sent your refund on July 10—a delay of 145 days. The first 45 days do not earn interest, so interest accrues for 100 days. Your refund amount is $2,000.

The delay spans two quarters: February 15 to March 31 (44 days) and April 1 to July 10 (101 days). Let's say the Q1 rate was 8 percent and the Q2 rate was 8 percent (rates are the same in this example for simplicity). For the first quarter portion: $2,000 × 0.08 ÷ 365 × 44 = $19.29. For the second quarter portion: $2,000 × 0.08 ÷ 365 × 56 = $24.55. Total interest: $43.84.

The IRS does this calculation for you. You will not see the math on your refund notice, but the interest will appear as a separate line item on your check or deposit. If you want to verify the calculation yourself, you need the exact filing date, the exact refund date, your refund amount, and the quarterly rates for the relevant quarters.

When delays trigger interest calculations

Not every slow refund earns interest. The 45-day clock starts the day you file, not the day you mail your return or the day the IRS receives it. If you file electronically, the filing date is the date you submit. If you mail a paper return, the filing date is the postmark date on the envelope.

The 45 days is measured from filing to the date the IRS sends the refund, not the date it arrives in your account or mailbox. For direct deposits, "sent" means the date the IRS initiates the transfer to your bank. For checks, it means the date the check is mailed, not when you receive it.

Common reasons for delays past 45 days include math errors on the return, missing information (such as a missing Social Security number for a dependent), identity verification holds, fraud review, or a claim for the Earned Income Tax Credit that requires additional review. During high-volume periods, even error-free returns can take longer, though the IRS aims to process most returns within 21 days of electronic filing.

How to learn about interest was added to your refund

Check your IRS refund notice, which the IRS mails separately from your refund. The notice shows your original refund amount, any interest added, and the total you received. If you filed electronically and chose direct deposit, the notice arrives by mail within two weeks of the deposit.

You can also view your refund status through the IRS website using the "Where's My Refund?" tool. This tool shows the current status but does not display interest calculations until the refund is actually sent. Once the refund is processed, log into your IRS account (if you have one) to see the detailed breakdown, or wait for the paper notice.

If you received a refund and want to confirm the interest calculation, gather your filing date, refund date, refund amount, and the quarterly interest rates from the IRS website. The formula is: (Refund Amount × Interest Rate ÷ 365) × Number of Days Over 45. If the math does not match what the IRS sent you, contact the IRS at 1-800-829-1040 to ask them to review the calculation.

Interest on refunds held for offset or other reasons

If the IRS delays your refund because it is offsetting the money to pay a federal debt (such as back taxes or student loans), interest still accrues on the delayed portion. The offset itself does not stop the interest clock. However, if the IRS is holding your refund pending identity verification or fraud review, the interest calculation still applies once the delay exceeds 45 days.

State refunds are separate from federal refunds and have their own interest rules. Some states pay interest on delayed refunds; others do not. Check your state tax agency's website for the specific rule in your state. State interest rates and thresholds vary widely—some states pay interest after 30 days, others after 60 days, and some do not pay interest at all.

What to do if you believe the interest calculation is wrong

Start by reviewing your IRS notice carefully. Confirm the filing date, refund date, and refund amount shown on the notice. Then calculate the number of days between filing and refund (subtract 45 from that total). Look up the quarterly interest rates for each quarter that passed during the delay on the IRS website.

If you believe there is an error, contact the IRS at 1-800-829-1040 with your notice in hand. Have ready your Social Security number, filing date, refund amount, and the date you received the refund. The IRS can review the calculation and correct it if an error occurred. Do not assume the calculation is wrong without working through the math first—the quarterly rate changes can make the interest appear higher or lower than expected.

Frequently Asked Questions

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

No. Interest paid by the IRS on a delayed 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. This is one of the few types of interest income that is not subject to federal income tax.

What if my refund was delayed but I filed a paper return?

The filing date is the postmark date on your envelope, not the date the IRS received it. Interest accrues from that postmark date. If you did not keep the receipt showing the postmark, contact the IRS with your Social Security number and they can look up the filing date in their system.

Can I request a refund of the interest if I do not want it?

No. The interest is required by law when a refund is delayed more than 45 days. You cannot decline it or ask the IRS to withhold it. The interest is yours once the delay threshold is met.

Does the interest rate change if my refund is delayed across multiple years?

Yes. If your refund spans from one calendar year into the next, the interest rate for each quarter applies to the portion of the delay that falls in that quarter. The IRS breaks the calculation into quarters, so a delay that crosses a year boundary uses the rates in effect for each quarter involved.

What if the IRS made an error and my refund was delayed because of their mistake?

You still receive interest on the delayed amount. The interest is automatic and does not depend on the reason for the delay. If the IRS made a significant error that caused an unusually long delay, you can file a complaint with the Taxpayer Advocate Service, but this does not change the interest you receive—it may result in additional compensation only in rare cases of severe mishandling.