IRS Interest Payments - Direct Deposit or Paper Check?

Generally speaking, the IRS usually sends interest payments using the same method you selected for your refund, but there are some exceptions. If your original refund was direct deposited, they'll probably send the interest the same way, assuming they have your banking information on file. However, I've seen cases where they might send a paper check for the interest portion even if the main refund was direct deposited, especially if there was a significant delay between the refund and interest calculation.

This happened to me last year with my 2022 return. I got my refund via direct deposit in early May, but then about three weeks later I received a paper check in the mail for the interest amount. I remember being confused because I wasn't expecting anything else from the IRS. I actually almost threw it away thinking it was junk mail! The whole experience reminded me of 2020 when they were sending out those stimulus payments - some people got direct deposits while others got checks.

Fyi, if ur waiting on interest payments and need to talk to someone at the IRS abt it, good luck getting thru their phone system rn. I spent hrs trying to reach an agent last week. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) and got connected in ~15 mins. The agent confirmed my interest payment was coming as a separate check even tho my refund was DD. Apparently their system sometimes can't process interest to the same acct as refund. Worth the fee tbh just to know what to expect.

I had this exact situation last summer! My refund was delayed by almost 4 months, and I was owed interest. I kept checking my bank account daily expecting the interest to be deposited there since that's how I got my refund. After three weeks of nothing, I decided to check my mailbox more carefully and found a paper check for $43.17 that had been sitting there for days! The envelope looked just like any other government mail, not particularly special. So my advice is to watch both your bank account AND your mailbox for a few weeks after getting your refund.

Has anyone considered what happens if the interest check gets lost in the mail? I was expecting interest on my delayed refund last year, and after waiting for weeks with nothing showing up, I started to worry. Should I have called the IRS immediately, or was there a specific waiting period? Turns out my check had been delivered to my neighbor's mailbox accidentally. Thankfully they brought it over, but I was relieved to learn that if it had truly been lost, the IRS can reissue interest payments after you report it missing. Just be prepared to wait another 6-8 weeks for the replacement.

I just went through this process with a client (I'm a bookkeeper). Here's what typically happens with IRS interest payments: • If your refund is less than $10,000: Interest usually follows same payment method as refund • If your refund is over $10,000: Higher chance of receiving a paper check for interest • Timing: Interest typically arrives 2-4 weeks after your refund • Notification: They send a letter explaining the interest (Notice CP-2000 usually) • Amount: Interest is taxable income for next year's return The most recent client had a $15,000 refund via direct deposit but received interest as a paper check three weeks later.

This is really useful information everyone! I'm in a similar situation waiting for interest on my 2023 refund that was delayed until January. Based on what I'm reading here, it sounds like I should be watching both my bank account and mailbox over the next few weeks. Quick question - for those who received paper checks for interest, did the envelope have any special markings or did it look like regular IRS correspondence? I want to make sure I don't accidentally overlook it among other mail. Also, does anyone know if the interest amount is calculated from the original due date of the return or from when they were supposed to process it?

Just wanted to add my recent experience to this thread! I received my delayed 2023 refund in February via direct deposit, and then got the interest payment about 3 weeks later - also via direct deposit to the same account. The interest amount was $127.84 and showed up with a description like "IRS TREAS 310 TAXREFUND" similar to how the original refund appeared. I think the IRS systems have gotten better at keeping payments consistent. I did receive a notice in the mail about a week after the interest deposit explaining the calculation, but the money hit my account first. One thing I noticed is that the interest deposit happened on a Wednesday, whereas my original refund came on a Friday. Not sure if that timing difference means anything, but thought I'd mention it in case others are tracking deposit patterns. So definitely monitor both your bank account AND mailbox as others have suggested - seems like it really varies by case!