Your 2021 Tax Refund May Come Early This Year
The agency has put out notice that most Americans should get their hands on their refunds within twenty-one days of filing.
Despite much talk of a nightmare scenario at the Internal Revenue Service (IRS), the current tax season is surprisingly moving along with few hiccups.
"The IRS is off to a strong start to this year’s tax season,” the agency said in a statement.
According to NJ.com, “so far, the agency has processed 12.99 million of the 16.68 million returns it has received since the 2021 season started on January 24. Of those, 4.46 million have resulted in refunds that average $2,306, compared to last year’s average of $2,800.”
The site added that “the lower average amount could be in part because of the child tax credit, half of which was pre-paid monthly to families with qualifying children in the last six months of 2021.”
With this in mind, when exactly can taxpayers expect to see their refunds if they file their returns in the coming days?
Backlogs and Staffing Shortages
Do keep in mind that the agency still has to get through 24 million tax returns from last year. National Taxpayer Advocate Erin Collins recently issued a report to Congress that stated that she is “deeply concerned about the upcoming filing season.” The remaining unprocessed returns are from the “most challenging year taxpayers and tax professionals have ever experienced,” she added.
Making matters worse is the fact that the IRS is dealing with acute staffing shortages. In fact, compared to 2010, the agency has approximately 20,000 fewer employees and 20 percent less funding when adjusted for inflation, according to the Congressional Budget Office.
Still, the agency has put out notice that most Americans—if they have error-free returns and file electronically—should get their hands on their refunds within twenty-one days of filing.
Situations to Take Note Of
There are, however, some caveats to that timeline.
"Claiming the Earned Income Tax Credit or the Child Tax Credit will slow down your tax return due to regulations designed to deter fraud, but that means people who claim those credits and filed their returns on January 24 or close to that date may not receive their refund until early March,” CBS News noted.
"And other issues can slow down your refund, such as errors like math problems or incorrectly stating how much you received from the advanced Child Tax Credit payments. In those cases, your tax return could get flagged, leading to delays of weeks or even months,” it continued.
Furthermore, the IRS recently announced that returns with errors involving the third stimulus check could potentially take up to four months to resolve.
"You want to make sure that your returns are right,” Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida, told CNBC.
"Because it’s going to be really difficult to get a hold of anyone (at the IRS) to talk through your situation,” he continued.
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.