The IRS pays interest on refunds delayed beyond 45 days
If the IRS takes longer than 45 days to send your refund after you file, they 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 quarter 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. That rate applies to refunds delayed from January through March. The rate shifts on April 1, July 1, October 1, and January 1 each year. If your refund straddles two rate periods, you earn the first rate for the days in that quarter and the second rate for days in the next quarter.
The 45-day clock starts the day you file, not the day the IRS receives your return. If you file on paper, the postmark date counts as your filing date. If you file electronically, the date you submit counts.
Key Takeaways
- Interest accrues only if the IRS takes more than 45 days to issue your refund after you file.
- The federal interest rate on tax refunds is set by law and changes quarterly — it was 8 percent for the first quarter of 2024.
- Interest is calculated daily and added to your refund automatically; you do not need to claim it or file anything extra.
- Most refunds arrive within 21 days of filing electronically, so most people do not receive interest.
- State tax refunds have their own interest rules and rates, which vary by state.
How the IRS calculates the interest amount
The IRS uses a simple daily compounding formula. They take the refund amount, multiply it by the interest rate for that quarter, divide by 365, and multiply by the number of days the refund was delayed past 45 days. If your refund straddles two quarters, they run the calculation twice — once for each rate period — and add the results.
Example: You file electronically on January 10 and the IRS issues your refund on June 15. That is 157 days. The first 45 days earn no interest. The remaining 112 days earn interest. From January 10 to March 31 is 80 days at 8 percent. From April 1 to June 15 is 32 days at the rate in effect for that quarter (which you would need to check the IRS website to find). The IRS adds both amounts to your refund.
You do not calculate this yourself. The IRS sends you a notice showing the refund amount, the interest amount, and the total. The interest appears on the check or deposit, or in your online account if you set up direct deposit.
When you actually receive the interest payment
Interest is included in your refund check or direct deposit — it is not sent separately. If the IRS issues your refund by check, the check amount includes both the original refund and the interest. If you set up direct deposit, the full amount (refund plus interest) goes into your bank account in a single deposit.
The IRS does not pay interest on interest. Once you receive the refund with interest included, no additional interest accrues, even if there is a further delay in the check reaching you or clearing your bank.
Why most refunds do not earn interest
The vast majority of electronically filed returns receive refunds within 21 days. The IRS publishes this as their standard timeframe. Since interest only starts after 45 days, most people never reach the threshold.
Refunds take longer when the return is incomplete, contains errors, or triggers a review. Common delays include mismatched Social Security numbers, missing information on schedules, or a claim for the Earned Income Tax Credit that the IRS wants to verify. Paper returns take longer than electronic ones — typically 4 to 6 weeks even without problems.
If your refund is delayed because you owe back taxes, child support, or federal student loans, the IRS may offset (reduce) your refund to pay those debts. Interest still accrues on the portion that is delayed, but you receive less because of the offset.
State tax refund interest rules vary widely
States set their own interest rates and rules for delayed refunds. Some states pay interest at the same federal rate. Others use a different rate set by state law. A few states do not pay interest on refunds at all, no matter how long the delay.
Check your state's tax department website for the specific rate and the number of days before interest starts. Some states begin interest after 30 days, others after 60 days. A handful require you to request interest in writing, though most add it automatically like the IRS does.
If you filed a joint federal return but separate state returns, or if you live in one state and work in another, you may have multiple state refunds with different interest rules. Track each one separately using your state's refund status tool.
How to track whether your refund qualifies for interest
Use the IRS "Where's My Refund?" tool on IRS.gov. Enter your Social Security number, filing status, and the exact refund amount from your return. The tool shows the current status and, once issued, the date the refund was sent. Count the days from your filing date to the issue date. If it is more than 45 days, you are may have access to to interest.
The tool updates once per day, usually overnight. If it says "Return Received" but does not show an issue date yet, your refund has not been processed. Check back the next day.
For state refunds, use your state's tax department website. Most states have a similar tracking tool. Search "[your state] tax refund status" to find it.
If the IRS issued your refund more than 45 days after you filed and you do not see interest added, contact the IRS at 1-800-829-1040. Have your return and the issue date ready. The IRS can verify whether interest was calculated and, if it was missed, reissue the payment.
What happens if you disagree with the interest calculation
Interest calculations are straightforward and rarely wrong, but mistakes do happen. If you believe the IRS calculated interest incorrectly, request a recalculation by calling 1-800-829-1040 or writing to the IRS office that issued your refund (the address is on the notice they sent you).
Bring documentation of your filing date (the postmark if you filed by mail, or your electronic filing confirmation if you filed online) and the refund issue date from the IRS notice. The IRS will review the calculation and send you a corrected notice if an error is found.
Interest disputes are not common because the IRS applies the same formula to all delayed refunds. If you are unsure whether you are owed interest, the IRS can tell you during a phone call — you do not need to file anything or hire help.
Frequently Asked Questions
Do I have to pay taxes on the interest I receive?
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 applies to both federal and state interest.
What if my refund was delayed because of an IRS error, not because of something I did?
You still receive interest. The IRS pays interest on all refunds delayed past 45 days, regardless of the reason for the delay. If the delay was caused by an IRS mistake, you may also be may have access to to damages under the Taxpayer Bill of Rights, but that is a separate claim.
Can I get interest on a refund that was offset for back taxes or child support?
Yes. Interest accrues on the full refund amount up to the day it was issued, even if part of it was offset. You receive interest on the net amount that was actually paid to you.
What interest rate applies if I file an amended return?
Amended returns follow the same 45-day rule and interest rates as original returns. The clock starts when you file the amended return, not when you filed the original. If the IRS takes more than 45 days to process the amended return and issue a refund, interest accrues at the rate in effect during the delay period.
Will I receive interest if I file my return late?
Yes, as long as the IRS takes more than 45 days to process it after you file. Filing late does not change the interest rule. However, if you file late, you may owe penalties and interest on taxes owed, which is separate from interest on a refund.