If your clients contact you about a mysterious bank deposit from the IRS, you can assure them it’s not a mistake. The IRS reported that 13.9 million taxpayers who filed their 2019 income taxes on time and received a refund will now be receiving a second payment from the IRS: an interest payment.
This interest payment isn’t routine — it’s because of the disaster-related postponement of the income tax deadline to July 15th. The IRS is required by law to pay interest when there is a disaster-related postponement. You likely haven’t seen this before and let’s hope we won’t see it again any time soon.
The interest checks won’t be large — the average check amount is $18. And yes, you should let your clients know that if they receive more than $10 in interest payments to expect to receive form 1099-INT in the mail in January 2021. They definitely won’t want to leave this interest payment off their 2020 federal income tax return.