Millions of Taxpayers Could Get Their Refunds This Week
However, even with direct deposit, there is a possibility that it could take an extra day or two for the funds to land in a personal bank account.
For the past several weeks, the Internal Revenue Service (IRS) has said that most American taxpayers—if they have error-free returns and file electronically—should be able to get their hands on their tax refunds within twenty-one days of filing.
However, there are two particular groups that have had to endure much longer delays: individuals who claimed either the Child Tax Credit or the Earned Income Tax Credit on their returns. In all, more than thirty million families claimed the Child Tax Credit and about twenty-five million claimed the Earned Income Tax Credit.
“These filers are facing delays because of a law designed to deter frauds linked to those valuable tax credits, such as by screening for fraudsters who try to claim someone’s refund as their own,” noted Aimee Picchi at CBS MoneyWatch, adding that such taxpayers who filed early in the tax season are likely to begin receiving their refunds on March 1.
But this timeline, citing the IRS, “only goes for taxpayers who also meet three additional requirements: filing electronically, choosing to get their refund by direct deposit and not being identified by the IRS as having a problem on their returns,” she continued.
In addition, even with direct deposit, there is a possibility that it could take an extra day or two for the funds to land in a personal bank account.
Millions of Refunds Issued
Despite the ongoing backlogs and staffing issues at the IRS, the agency has confirmed that it has issued more than 22 million tax refunds that are worth roughly $78 billion. In all, about 36 million taxpayers have filed their returns.
The average refund came in at $3,536, which is up by 23 percent from the average refund of $2,880 at the same time last year. Some families, though, are seeing smaller refunds this year due to the advanced payments from the Child Tax Credit and the pausing of federal student loan payments.
The IRS noted that the typical tax refund size can change “dramatically” from week to week.
“Weekly numbers can shift dramatically during the initial weeks of filing season due to numerous factors, including the calendar and filing patterns that can change year to year,” the agency wrote.
Meanwhile, in order to address a massive backlog of unprocessed tax returns and correspondence, the IRS has been using multiple “surge teams” to bring the inventory down to more manageable levels.
National Taxpayer Advocate Erin Collins stated that “the coronavirus pandemic has created enormous challenges for taxpayers, tax professionals, and the IRS,” and that the remaining unprocessed returns are from the “most challenging year taxpayers and tax professionals have ever experienced.”
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.