How Quickly Will You Receive Your Tax Refund?

Are you eager to receive your tax refund and getting frustrated about how long it takes? In this article, we will explore the actual processing times, the factors that can delay refunds, and tips to speed up the process. Understanding how quickly the IRS processes refunds is essential for financial planning during tax season.

Understanding the Normal Processing Time

If you file your tax return electronically and request direct deposit, the Internal Revenue Service (IRS) states that 'normal' processing time is within 21 days of file acceptance. However, this can vary based on the complexity of your return and specific tax credits you claim.

EIEC and Refundable Credits

Returns that include the Earned Income Tax Credit (EITC) or other refundable credits might not process before February 15. If this is the case, refunds typically start being distributed during the first week of March. This is due to the additional scrutiny required for these types of returns.

Updates for the 2020 Tax Season

The 2020 tax season saw unprecedented delays, with refunds not reaching many taxpayers until July 2021 instead of the usual April. This was largely due to the IRS's capacity to process large volumes of returns, insurance claim adjustments, stimulus payment reconciliation, and managing the backlog of 2019 returns.

How Soon Can You File Your Return?

Globally, tax return forms are typically released to taxpayers around January, right after the IRS has finalized the previous year's forms. Companies like TurboTax, HR Block, and others release software updates quickly to ensure tax professionals can access the latest forms as soon as possible. Libraries also offer resources for tax return forms.

Factors That Can Extend Processing Times

Several factors can extend the processing time for your tax refund:

Complexity of Your Return: If your return includes multiple deductions, credits, and complex transactions, it may take longer for the IRS to process. This is especially true for returns with refundable credits like the Earned Income Tax Credit (EITC) and the American Opportunity Credit. Stimulus Payment Claims: If your return claims additional stimulus funds and the IRS finds that they already provided the stimulus, your refund could be reduced or your return could be delayed for further review. Backlog of Returns: The 2019 tax season saw a significant backlog of unprocessed returns that were submitted after the major shutdowns began in April 2020. This backlog, combined with processing new returns, led to longer wait times.

Tips to Speed Up Your Refund

While you can't control the IRS's workload, you can take steps to ensure your refund moves through the system more quickly:

File Electronically: Filing electronically and requesting direct deposit is the fastest way to receive your refund. The IRS processes e-filed returns more quickly than paper submissions. Review and Correct Errors: Common errors, such as misspelling your name or using an incorrect Social Security number, can delay processing. Take the time to review your return for any errors before filing. Use the Correct Forms: Ensure you use the correct forms for your situation. Incorrect forms can cause delays and may require resubmission. Check the Status Regularly: Keep an eye on the status of your refund through the IRS’s official website. There are tools available that can help you track your refund.

By following these guidelines, you can minimize delays and increase the chances of receiving your tax refund more quickly.

Conclusion

The timing of your tax refund depends on a variety of factors. While the IRS aims to process e-filed returns within 21 days, this can be extended for more complex returns or during busy tax seasons. Understanding these factors and taking proactive steps can help you navigate the process and ensure a timely refund.