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May 13, 2026 • 2:20 PM ET
The IRS overpayment interest rate for Q2 2026, covering April 1 through June 30, is 6% annually, confirmed on the IRS rates page. This rate applies to refunds not issued within 45 days of the return due date. The rate dropped from 7% in Q1 2026 to 6% in Q2. IRS interest payments are taxable income.
If the IRS takes more than 45 days to send your refund after you file, the IRS owes you interest on the delay. The current rate is 6% per year for Q2 2026, confirmed at IRS rates. Interest is calculated daily.
A $3,571 refund delayed 90 days past the 45-day window earns approximately $52.80 in IRS interest that is yours by law. Most Americans never check for it. Here is exactly how IRS interest on refund works, how to calculate what you are owed, and how to verify the IRS actually paid it.
When the IRS Owes You Interest and the 45-Day Rule
The IRS is not required to pay interest on every delayed refund. The specific legal threshold under IRC Section 6611 is that interest accrues only if the refund is not issued within 45 days of the later of the return due date or the date you actually filed.
For most 2025 returns filed by April 15, 2026, the 45-day window runs through May 30, 2026. If the IRS does not issue your refund by May 30, interest accrues from April 15 onward on the full refund amount. For returns filed after April 15 with an extension, the 45-day window begins from your actual filing date.
The IRS interest rate is set quarterly under IRC Section 6621 at the federal short-term rate plus 3 percentage points. For Q2 2026, covering April through June, the rate is 6% annually, confirmed at irs.gov/payments/quarterly-interest-rates.
For Q1 2026 covering January through March, it was 7%. The IRS refund guide at Investozora explains the full refund timeline from filing through deposit. The money movement system guide explains the Bureau of Fiscal Service role in executing IRS refund disbursements through FedACH after the IRS authorizes the payment.
How to Calculate What the IRS Owes You
The IRS calculates IRS interest on refund daily at 6% annually divided by 365 days, equaling approximately 0.01644% per day. The 2026 average IRS refund is $3,571 as of March 20, 2026, confirmed in IRS release IR-2026-43.
At 0.01644% per day on $3,571, interest accrues at approximately $0.587 per day on the average refund. A refund delayed 30 days past the 45-day window produces approximately $17.60 in interest owed. A delay of 90 days produces approximately $52.80. A delay of 180 days produces approximately $105.60.
If the IRS delays your refund due to a processing code such as TC 570, indicating additional action pending, and that delay extends the refund past the 45-day threshold, the interest clock runs on the full delay period including the time your return sits in IRS processing.
The IRS authorizes the refund through its internal systems. The Bureau of Fiscal Service at Treasury then executes the deposit through FedACH to your bank. The interest calculation is completed by the IRS before the Bureau of Fiscal Service ever receives the payment file.
The IRS Code 846 article explains exactly what the refund sent date means within that disbursement sequence. The IRS Code 570 article explains the most common reason refunds exceed the 45-day threshold and trigger the interest requirement.
What TC 776 Means and How to Check If You Were Paid
Transaction Code 776 appears on your IRS tax transcript when the IRS has added interest to your refund payment. If your refund was delayed past 45 days and your transcript does not show TC 776, you may not have received the interest you are legally owed.
Access your full transcript at irs.gov/individuals/get-transcript. Look for TC 846 confirming the refund was sent, and look separately for TC 776 labeled interest credited to your account. The dollar amount appears beside the code. If you believe you are owed IRS interest on your refund but see no TC 776, contact the IRS directly at 1-800-829-1040 for individual taxpayers.
The interest payment may arrive as a separate ACH credit from your main refund. You may see two distinct deposits from the IRS in your bank account: one for the refund principal and one for the accrued interest. Both travel through FedACH as separate payment instructions from the Bureau of Fiscal Service. The IRS refund guide at irs.gov confirms this payment structure and the 45-day rule in detail.
What the 2026 Rate Drop Means and What the Fed Decides Next
The IRS interest rate dropped from 7% in Q1 2026 to 6% in Q2 2026 because the federal short-term rate, which drives the IRC Section 6621 formula, moved lower. The federal funds rate currently stands at 3.5% to 3.75%, confirmed by the Federal Reserve’s April 29 FOMC statement at federalreserve.gov.
The federal short-term rate derived from that level places the IRS overpayment rate at 6% to 6.25% under the formula. If the FOMC raises rates at the June 16 to 17 meeting, which three April 29 dissenters actively supported, the IRS interest rate for Q3 2026 covering July through September would increase accordingly on the next quarterly reset.
If the Fed holds rates, the Q3 IRS rate remains near 6%. The FOMC minutes releasing May 20 at 2:00 PM ET will reveal which scenario is more probable for June. The FOMC minutes analysis publishes immediately after release.
The Warsh rate policy article explains how the new Fed chair’s approach to rates flows through to savings rates, IRS interest rates, and every other rate instrument tied to the federal short-term rate.
What You Should Do Now
- Check the date your 2025 return was filed and determine whether 45 days have passed. For April 15 filers, May 30 is the threshold.
- Access your IRS transcript at IRS transcript and look for TC 846 confirming your refund was sent and TC 776 confirming IRS interest was credited.
- If your refund was delayed past 45 days and you see no TC 776, call 1-800-829-1040 to inquire about the interest owed.
- IRS interest payments are taxable ordinary income and will generate a Form 1099-INT that must be reported on your 2026 return when it arrives.
- Watch the Q3 2026 IRS interest rate update at IRS rates update after the June 16 FOMC decision.
- If the Fed raises rates, the Q3 IRS interest rate on any ongoing delayed refund increases starting July 1, 2026.
