CUSTOMS COMPLIANCE | 2026-10-04

CBP Owes You Interest on Your IEEPA Refund — Here’s How It’s Calculated

Recovering the IEEPA tariffs you paid is only part of it. The law requires CBP to pay interest on the refund, running from the day you paid — a figure many importers overlook.

When the Supreme Court struck down the IEEPA tariffs, importers who paid them became entitled to recover those duties. But the recovery is larger than the tariffs alone: federal law requires CBP to pay interest on refunded customs duties. Under 19 U.S.C. § 1

Importers chasing an IEEPA refund tend to fixate on the tariff dollars themselves and stop there. But federal law adds a second layer to the recovery — interest that has been quietly accruing since the day each duty was paid — and on older or larger entries that figure is anything but a rounding error. For California importers that paid substantial IEEPA tariffs over many months of entries, the interest component can be a meaningful share of the total recovery. This guide explains the statute that requires the interest, when it starts and stops, how the quarterly rate is set, how it is calculated, the path by which it is paid, and the deadlines that must be met to capture both the principal and the interest.

The Refund Includes Interest — The Governing Rule

When CBP refunds excess duties to an importer, it does not simply return the principal. Under 19 U.S.C. § 1505, CBP pays interest on the overpayment of customs duties. For IEEPA refunds — where importers paid tariffs that were later invalidated — this means the recovery is the amount of the IEEPA duties paid, plus statutory interest on that amount. The interest is a matter of law, not agency discretion; § 1505 directs that interest be paid on the amount of any refund of excess duties, and the rate framework is fixed by statute. An importer does not have to persuade CBP to grant interest as a favor — it is owed by operation of law once a refund is due.

When Interest Starts and Stops

The interest on a customs-duty overpayment generally accrues from the date the duties were deposited or paid until the date the refund is made. The practical consequence is significant: the longer ago the duties were paid, the more interest has accumulated. Importers who paid IEEPA tariffs early in the period, and whose entries have been outstanding for many months, may be owed substantial interest on top of the principal.

Because the interest runs until the refund is actually paid, delays in resolving a claim do continue to add interest — but that is not a reason to wait. The claim itself can be lost to a missed deadline, and a lost claim earns no interest at all. The accrual period is simply the span between the deposit date and the refund date, and it is measured entry by entry, since each entry's duties were paid on its own date.

The Rate — Tied to 26 U.S.C. § 6621

The interest rate on customs refunds is tied to the federal rate under 26 U.S.C. § 6621 — the same framework used for tax overpayments and underpayments administered by the IRS. That rate is adjusted quarterly and is based on the federal short-term rate plus a statutory margin set by § 6621. Because the rate changes each quarter, the interest on a refund is not a single flat percentage applied to the whole period. Instead, the applicable rate for each quarter is applied to the outstanding overpayment for the days it was outstanding in that quarter, and the quarterly amounts are summed over the life of the overpayment. The result reflects the actual rates in effect across the entire accrual period.

How the Interest Is Calculated — Step by Step

Although CBP computes the interest when it processes the refund, importers benefit from understanding the mechanics so they can verify the figure:

Identify the deposit date for each entry — the date the IEEPA duties were paid.
Identify the overpayment amount — the IEEPA duty portion being refunded on that entry.
Apply the § 6621 rate quarter by quarter from the deposit date forward, using the rate in effect for each quarter.
Sum the quarterly interest to the date the refund is paid.
Repeat per entry and total across all entries in the claim.

Verifying the computation matters because an understated accrual period or a wrong rate can shortchange the recovery.

Why the Interest Can Be Substantial

Two factors make the interest meaningful on IEEPA refunds:

Large duty outlays. Importers with significant IEEPA tariff exposure — across many entries or high-value goods — generate correspondingly large interest.
Long outstanding periods. IEEPA duties paid months or more ago continue to accrue interest for the entire time until the refund is made.

For a business that paid substantial IEEPA tariffs over an extended period, the interest can represent a non-trivial addition to the principal refund. The combination of a large base and a long period is precisely the situation many California importers are in.

Getting the Interest — It Follows the Refund Path

The interest is paid as part of the refund, so it follows whichever refund path applies to the entries. The path depends on each entry's liquidation status under 19 U.S.C. § 1500 and the timing rules of 19 U.S.C. § 1504:

CBP's administrative refund processing for eligible entries handled within the agency's post-liquidation window;
a protest under 19 U.S.C. § 1514, following 19 C.F.R. Part 174, for entries within the 180-day protest window; or
a Court of International Trade complaint under 28 U.S.C. § 1581 for finally liquidated entries past the protest window — under § 1581(a) after a denied protest, or invoking residual jurisdiction under § 1581(i) where applicable.

Ensuring the refund is pursued through the correct path — and within the governing deadlines — is what secures both the principal and the interest. Each entry's liquidation status and date determine the available path and the clock that runs with it.

Common Mistakes That Cost Importers Their Interest

Treating the refund as principal only. Some importers accept a refund figure without checking that interest under § 1505 was included and correctly computed.
Not verifying the accrual period. If the deposit date is understated, the interest is understated.
Ignoring the quarterly rate changes. A flat-rate assumption can misstate the amount in either direction.
Letting a deadline pass. A claim lost to the expired 180-day protest window under 19 U.S.C. § 1514 earns neither principal nor interest.
Failing to isolate the IEEPA duty. Interest is owed on the refundable overpayment, so the base must be identified correctly.

Deadlines Still Control — Interest Does Not Change Them

It bears emphasis that the accrual of interest does not extend or soften any deadline. The protest must still be filed within 180 days of liquidation under 19 U.S.C. § 1514(c)(3); a CIT suit after a denied protest must still be filed within 180 days of the denial under 28 U.S.C. § 1581(a). Interest rewards the time a valid claim is outstanding; it does nothing for a claim that was never preserved. Prompt, correct action captures the full recovery.

Leaving the Interest on the Table Is Leaving Money Behind

For an importer focused on recovering the tariffs themselves, the interest is easy to overlook — but it is money the law requires CBP to pay. Confirming the accrual period and the applicable quarterly rates, and pursuing the refund through the correct and timely path, ensures the recovery includes the full principal and the interest. Because the interest keeps accruing until payment but the claim can be lost to a missed deadline, prompt and correct action captures the most.

How the § 6621 Rate Framework Works

Because the interest rate is borrowed from the tax code, it helps to understand the framework at a high level. Under 26 U.S.C. § 6621, the overpayment interest rate is built on the federal short-term rate, which the Treasury determines, plus a statutory number of percentage points added on top. The federal short-term rate itself moves with prevailing short-term borrowing costs, so the overpayment rate rises and falls over time. Treasury announces the applicable rates on a quarterly basis, and each quarter's rate governs the overpayment for the days it was outstanding during that quarter. There is also a distinction in § 6621 between ordinary overpayments and certain large corporate overpayments, which can carry a different rate tier. The practical takeaway for an importer is that no single percentage describes a multi-quarter accrual; the true interest is a stitched-together series of quarterly computations.

Why the Accrual Period Deserves Close Attention

The length of the accrual period often matters more to the total than the rate does. Because interest runs from the date each entry's duties were deposited until the refund is paid, two entries with identical IEEPA duty amounts can generate very different interest if one was paid much earlier than the other. For a California importer that filed entries steadily over many months, the earliest entries carry the longest accrual and therefore the largest interest relative to principal. This is also why the deposit date must be taken from the records for each entry rather than estimated — an accrual period that starts even a few months late understates the interest on every affected entry. When CBP computes and pays the refund, confirming that it used the correct deposit date for each entry is a meaningful verification step, not a formality.

Interest in Each Refund Path

The interest under 19 U.S.C. § 1505 attaches to the refund regardless of which path produces it, but the mechanics differ slightly by route:

Administrative refund processing. When CBP processes an eligible refund directly, it computes the § 1505 interest as part of the payment, and the importer verifies the figure against its own records.
Protest under 19 U.S.C. § 1514. When a protest is granted, CBP reliquidates the entry and refunds the overpaid duties with interest; the interest follows the refunded principal.
CIT litigation under 28 U.S.C. § 1581. When recovery comes through a judgment of the Court of International Trade, the resulting refund likewise carries the statutory interest the law requires on refunded customs duties.

In every case, the interest is an attribute of the refund itself, which is why securing the refund through the correct, timely path is what secures the interest along with it.

A California Importer's Practical Checklist

To make sure the interest is captured in full, an importer can work through a short checklist:

Pull the entry records to fix the deposit date for each entry.
Isolate the IEEPA duty amount on each entry as the interest-bearing base.
Confirm the liquidation date and the applicable refund path and deadline.
When the refund is paid, verify CBP's interest computation against the deposit dates and the quarterly § 6621 rates.
Raise any discrepancy promptly, since an understated accrual period or a wrong rate reduces the recovery.

Treating the interest as a line item to be verified, rather than whatever CBP happens to pay, is what ensures the recovery is complete.

Interest and the Decision to Act Now

Some importers reason that because interest keeps accruing, there is little harm in waiting to pursue a refund — the longer the money sits with the government, the more interest it earns. That reasoning is a trap. The interest under 19 U.S.C. § 1505 only has value if the underlying claim survives, and the claim is governed by hard deadlines that do not pause for anyone. The 180-day protest window under 19 U.S.C. § 1514(c)(3) runs from each entry's liquidation date; once it closes, the ordinary administrative route to the refund — and the interest that would have come with it — is gone. A claim lost to an expired deadline earns zero interest on zero principal. The correct way to think about the interest is that it is a bonus the law pays on a claim an importer has properly preserved and pursued, not a reason to let a claim age toward its own expiration. Acting promptly both secures the principal and locks in the interest that has already accrued, while leaving further accrual to run only for the time the claim is legitimately being processed.

Putting the Pieces Together for a Complete Recovery

A complete IEEPA refund recovery brings together several threads that this firm helps California importers manage as one. The entries must be identified and their liquidation dates confirmed, because those dates drive both the available path and the deadline. The IEEPA duty on each entry must be isolated, because that figure is both the principal to be refunded and the base on which interest is computed. The correct path — administrative refund processing, a protest under 19 U.S.C. § 1514, or litigation in the Court of International Trade under 28 U.S.C. § 1581 — must be chosen for each entry and pursued within its window. And when the refund arrives, the interest computed under 19 U.S.C. § 1505 and the § 6621 rate framework must be checked against the deposit dates and quarterly rates. Handled together, these steps turn a general entitlement into the full dollar recovery — principal and interest — that the law provides. Handled piecemeal, or too late, they leave money with the government that an importer was entitled to collect.

It is also worth remembering that the interest is part of the recovery an importer should expect to see documented. When a refund is paid, the payment should reflect both the refunded duty and a separately identifiable interest amount computed under 19 U.S.C. § 1505. If a refund arrives as principal alone, or with an interest figure that does not square with the deposit dates and the quarterly rates, that is a signal to look more closely rather than to accept the figure as final. Treating the interest as an expected, verifiable component of every customs-duty refund, and not as an occasional extra, is the habit that consistently captures the full amount the statute requires CBP to pay on an overpayment.

After the Interest Is Paid: Tax Reporting and Offsets

Two issues arise once the refund and its interest are actually paid. First, the interest has a different tax character from the refunded duties. Interest paid under 19 U.S.C. § 1505 is compensation for the use of the importer's money and is generally ordinary interest income under IRC § 61(a)(4); it does not reduce cost of goods sold or inventory basis the way a recovery of capitalized duties may. Importers should therefore record the interest separately from the duty refund so their tax advisors can report each correctly. Our guide to the income tax treatment of IEEPA refunds explains the tax benefit rule that applies to the duty portion.

Second, the amount that reaches the importer's account may be smaller than the duty-plus-interest calculation suggests. CBP has stated that refunds processed through CAPE are netted against underpayments on the same entry and are subject to set-off of legally fixed and undisputed debts under 19 CFR 24.72, and federal payments can also be intercepted through the Treasury Offset Program. When reconciling a payment, compute the expected interest entry by entry, then isolate any netting or offset before concluding that interest was miscalculated. Our guide to offsets against IEEPA refunds walks through that reconciliation and how to contest an offset taken against a disputed debt.

Frequently Asked Questions

Does CBP pay interest on IEEPA refunds?

Yes. Under 19 U.S.C. § 1505, CBP pays interest on refunded customs duties, so an IEEPA refund is the duties paid plus statutory interest. The interest is required by law, not discretionary.

When does the interest start?

Generally from the date the duties were deposited or paid, and it runs until the refund is actually made.

What is the interest rate?

A statutory rate tied to 26 U.S.C. § 6621, adjusted quarterly, applied to the outstanding overpayment for each period it was outstanding.

How is the interest calculated?

By applying the § 6621 rate in effect for each quarter to the overpayment for the days it was outstanding in that quarter, then summing the quarterly amounts to the refund date, entry by entry.

Why can the interest be large?

Because it accrues on large duty outlays over long outstanding periods — common for IEEPA tariffs paid many months ago across many entries.

How do I get the interest?

It is paid as part of the refund through the applicable path — administrative refund processing, a protest under 19 U.S.C. § 1514, or a CIT complaint under 28 U.S.C. § 1581 — so pursuing the correct, timely path secures it.

Does waiting increase my interest?

Interest does accrue until the refund is paid, but waiting risks missing the deadlines that preserve the claim. A lost claim earns no interest, so prompt action is still essential.

Should I verify CBP's interest figure?

Yes. Confirming the deposit date, the refundable base, and the quarterly rates applied lets you check that the interest was computed correctly and not understated.

Is the interest on an IEEPA refund taxable?

Generally yes. Interest paid under 19 U.S.C. § 1505 is ordinary interest income under IRC § 61(a)(4), reported separately from the refunded duties.

Can CBP reduce the interest through an offset?

The refund payment, including interest, can be reduced by netting within the entry and by set-off of legally fixed and undisputed debts under 19 CFR 24.72. Reconcile the payment against your expected refund and interest to identify any offset.

Related Customs & Trade Guides

Talk to a Customs Attorney About Your IEEPA Refund

Your IEEPA refund includes interest the law requires CBP to pay. Trembach Law Firm helps California importers recover the full amount. Call (213) 645-2246.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

Trembach Law Firm | 27001 Agoura Road, Suite 350, Calabasas, CA 91301