The IRS Could Owe You Additional Tax Return Money — Here’s Why
In its final 2022 Filing Season Statistics report, the IRS stated that it has processed more than 140 million individual income tax returns, including more than 96 million refunds for a total of over $282 billion, with an average refund of $3,039.
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Ninety-seven percent of the total returns received have been processed, and while that percentage makes it seem like tax season is nearly done and dusted, there is still a large number of manual tax returns that need processing and a large number of taxpayers that are still awaiting their refund.
However, unless you are in desperate need of your refund, the good news is that you may be owed interest on your unprocessed tax return.
Most individuals who e-filed returns with a direct deposit refund received their payment within the standard 21-day processing period. However, there are still millions who are experiencing refund delays months beyond their filing date.
If you do not receive your refund within 45 days of filing, the IRS is obliged to pay you interest for each additional day (if you filed by the IRS tax deadline day on April 18).
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Also, as of July 1, you will be able to receive an extra 1% more, according to CNET. The 4% compounded daily interest has increased to 5% due to recent Federal Reserve rate hikes. IRS interest rates are based on the Fed’s rate plus 3% points.
According to The Motley Fool, in 2020, almost 14 million taxpayers received interest payments of $18 on average.
As CNET reported, according to National Taxpayer Advocate Erin M. Collins’ latest report to Congress, the IRS has a backlog of 8.2 million tax forms which is more than last year and is getting processed at a slower rate.
“When I released my Annual Report to Congress six months ago, I wrote that ‘Paper is the IRS’s Kryptonite, and the agency is still buried in it.’ Fast forward to this Objectives Report: It’s Groundhog Day,” wrote Collins.
When GOBankingRates last reported on the issue, the IRS had 9.8 million individual tax filings still unprocessed, as of May 14. This included 2.4 million returns that required error corrections and 7.4 million paper returns awaiting processing. The total also included returns received in 2021 and new 2021 returns.
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The IRS will handle any possible interest owed, but you can always check on the status of your return here or contact the agency at 1-800-829-1040. It should be noted that if you do receive interest on your refund, it is taxable and will require filling out Form 1099-INT on your 2022 tax return (if the interest is more than $10).
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This article originally appeared on GOBankingRates.com: The IRS Could Owe You Additional Tax Return Money — Here’s Why
