ERC Refund Interest Calculator

Project the statutory interest the IRS will add to your Employee Retention Credit refund while you wait for processing. Supply the claim amount and the number of days outstanding to see accrued interest, the blended yield, and the total refund you can book once the check lands. Adjust the rate or compounding to reflect quarterly rate resets.

Total refundable Employee Retention Credit you are waiting to receive from the IRS.
Number of days the refund has been pending (file date to projected payment date).
Optional — defaults to the current IRS corporate overpayment rate (7.00%). Enter an updated blended rate if quarters span changes.
Optional — defaults to quarterly compounding. Override if you expect monthly or daily compounding.

For modelling purposes only. Confirm posted IRS interest rates, offsets, and refund timing with official transcripts or notices before recognising revenue.

Examples

  • Example 1 — $150,000.00 claim, 240 days pending, default 7.00% quarterly ⇒ Accrued interest: $7,002.95 USD • Refund total with interest: $157,002.95 USD • Daily interest: $29.18 USD/day • Interest as share of claim: 4.67% • Effective annualised yield: 7.19% • Compounding assumed: 4.00 periods/year at 7.00%
  • Example 2 — $350,000.00 claim, 420 days pending, 8.00% quarterly ⇒ Accrued interest: $33,400.25 USD • Refund total with interest: $383,400.25 USD • Daily interest: $79.52 USD/day • Interest as share of claim: 9.54% • Effective annualised yield: 8.24% • Compounding assumed: 4.00 periods/year at 8.00%

FAQ

Does the IRS always pay interest on ERC refunds?

Yes. When refunds take more than 45 days to process the IRS automatically computes overpayment interest from the filing date until the issue date on the cheque or direct deposit.

How do amended Forms 941-X affect the interest clock?

The outstanding days input should begin on the mailing or electronic submission date of the Form 941-X that generated the credit because that controls the interest accrual period.

Should I model state interest separately?

Many states mirror the federal ERC rules but apply their own overpayment rates. Run this calculator for the federal portion, then repeat with the relevant state rate if you expect a state refund as well.

What if the IRS offsets my refund against other taxes?

The interest still accrues until the offset date. Once applied, the IRS will reduce your outstanding balance by the interest and principal shown on the notice—use those figures to reconcile cash versus liability movements.

Additional Information

  • Interest on ERC refunds compounds daily but is reported using the IRS overpayment rate, which typically aligns with quarterly compounding in corporate notices.
  • The IRS overpayment rate is tied to the federal short-term rate plus three percentage points, so update the optional rate field when new quarterly tables post.
  • If your claim spans multiple quarters with different rates, average them based on the number of days each rate applied for a more precise estimate.
  • Interest is taxable income when received; plan estimated tax payments or cash reserves accordingly.

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