What Does Int Stand for on Tax Refund Check
What Does Int Stand for on Tax Refund Check
Did you just get a really odd check from the United States Treasury for some quirky amount, maybe like $2.26?
Some super small checks — averaging $18 a pop — began flooding mailboxes in the past week as the U.S. Treasury and the Internal Revenue Service sent interest payments to cover delays in federal income tax refunds for some 2019 returns.
My college-age son received his check for $2.26 in interest this weekend. Yes, that won't even cover a typical run to Taco Bell for the $5 box meal.
The interest payments are being made to 13.9 million taxpayers who experienced unusual delays in receiving their tax refunds this year.
The payments are being made to people who filed a 2019 return by this year's July 15 deadline and either received a refund in the past three months or will receive a refund in the future, according to the IRS.
Most interest payments will be issued separately from the tax refunds themselves.
Most people — roughly 12 million — will receive these small payments via direct deposit, not paper checks, the same way they receive their tax refunds.
The rest, though, will get a check.
Are these tiny checks the real deal?
Some people might even wonder if the checks are real.
Signs that it's a legitimate check include: The check will say "INT" at the left hand corner. And you will see the words "Tax Refund" at the bottom as well.
Yes, the interest is taxable
You'll want to keep a record of these interest payments because they're going to be taxable, according to the IRS.
The IRS notes: "By law, these interest payments are taxable and taxpayers who receive them must report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10."
Nothing, of course, has sounded particularly normal this year when it comes to taxes, tax refunds and stimulus checks.
In mid-August, some readers who had filed in March told me that they had still not received their income tax refunds. The IRS had noted a string of delays involving the filing of paper returns as a result of what it calls "COVID-19 mail processing delays."
The IRS stated online: "We're experiencing delays in processing paper tax returns due to limited staffing. If you already filed a paper return, we will process it in the order we received it. Do not file a second tax return or contact the IRS about the status of your return."
You can check your refund status online at "Where's my refund?" https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp
The latest interest payments involve refunds but even the interest payment isn't typical. It's different, the IRS noted, from a long-standing 45-day rule, which generally mandates that the IRS add interest to refunds on timely filed returns when the refund ends up being issued more than 45 days after the return due date.
"Instead, this year's COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline," the IRS said in its press release.
"Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline, as long as an individual files a 2019 federal income tax return by the postponed deadline — July 15, 2020, in this instance. This refund interest requirement only applies to individual income tax filers — businesses are not eligible."
The rate for the second quarter ending June 30 was 5%, compounded daily. Effective July 1, the rate for the third quarter dropped to 3%, compounded daily, the IRS said.
No interest will be added to any refund issued before the original April 15 deadline.
Watch out for phishing emails, too
And yes, the con artists might be aware of some of this delay to the tax season payouts, making it important to remain vigilant when it comes to spotting potential scams.
I received an email the other day from my bank that said: "Direct Deposit Payment On Hold." Yes, it looked like it was from my bank.
Sender, supposedly: "US Fedral BNFT PYMNT."
"A direct deposit payment with the below information is currently on hold for verification before we can complete the deposit into your account with us."
The email, helpfully, suggests that I click on a link to "complete verification here."
The small problem? If you look back at the email, it's not being sent from any bank. It's from 1falcon@mtaonline.net. It's not from my bank at all.
Other signs of phishing fraud: The message didn't address me by name. But its tone implied I needed to act quickly.
Typically, bankers warn the goal is to get you to click on a link in order to get you to volunteer personal information or open an attachment that may be malicious.
Bankers also warn that you should be suspicious if someone calls and claims to be from the bank but asks you to confirm your bank account or credit card numbers. Don't give out that information.
And considering that I'm not owed any money, I think it's pretty easy for me to ignore this one.
Contact Susan Tompor via stompor@freepress.com . Follow her on Twitter @ tompor . To subscribe, please go to freep.com/specialoffer. Read more on business and sign up for our business newsletter.
Source: https://www.freep.com/story/money/personal-finance/susan-tompor/2020/08/24/treasury-check-interest-payment/3428894001/
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