Waiting on your tax refund? The IRS will soon ‘pay’ you 5% interest — but there’s a catch

For taxpayers still waiting on their tax refunds don’t worry.

For taxpayers still waiting on their tax refunds don’t worry.

The refund may build 5% in interest that the IRS will have to pay you. Though there’s a catch.

The refund may build 5% in interest that the IRS will have to pay you. Though there’s a catch.

Accruing interest will jump from 4% to 5% on July 1, CNBC reported.

Accruing interest will jump from 4% to 5% on July 1, CNBC reported.

The IRS reportedly has 45 days after the filing deadline to process tax returns and then deposit refunds.

The IRS reportedly has 45 days after the filing deadline to process tax returns and then deposit refunds.

If the IRS doesn’t process the tax returns in time, interest builds on the refunds.

If the IRS doesn’t process the tax returns in time, interest builds on the refunds.

While this may sound awesome for taxpayers, the interest is taxable. Hence, taxpayers have to report the interest on their taxes.

While this may sound awesome for taxpayers, the interest is taxable. Hence, taxpayers have to report the interest on their taxes.

The IRS’ interest payments skyrocketed to $3.3 billion in 2021, a 33% increase from 2020.

The IRS’ interest payments skyrocketed to $3.3 billion in 2021, a 33% increase from 2020.

IRS has struggled with a backlog of unprocessed tax returns, due to the cuts to the department brought on by the COVID-19 pandemic.

IRS has struggled with a backlog of unprocessed tax returns, due to the cuts to the department brought on by the COVID-19 pandemic.

According to the chief taxpayer experience officer for the IRS, there are only 1.7 million tax returns left from the backlog.

According to the chief taxpayer experience officer for the IRS, there are only 1.7 million tax returns left from the backlog.

“Our goal is to bring the IRS back to a state prior to the pandemic,” Corbin said.

“Our goal is to bring the IRS back to a state prior to the pandemic,” Corbin said.

“We have to process this paper so we can get back to the business of providing the service the taxpayers deserve.”

“We have to process this paper so we can get back to the business of providing the service the taxpayers deserve.”

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