The annual tax filing season is now in full swing across the United States, with the Internal Revenue Service (IRS) anticipating a staggering 164 million individuals will submit their returns by the crucial April 15 deadline. This period marks a critical financial moment for millions of Americans awaiting potential refunds.
Projected Refund Amounts and Filing Trends
Last year, the average tax refund stood at a substantial $3,167. However, financial analysts have projected that this figure could be approximately $1,000 higher for the 2026 tax year. This significant increase is largely attributed to recent changes in federal tax legislation, which may put more money back into taxpayers' pockets. In the previous year, over 165 million individual income tax returns were processed by the IRS, with a remarkable 94 per cent of these filed electronically, showcasing a continued shift towards digital submission.
Potential Challenges and Staffing Concerns
While taxpayers with straightforward returns are unlikely to face significant delays, a national taxpayer advocate has issued a stark warning. The 2026 tax filing season could present considerable challenges for individuals who encounter issues or have complex filings. This concern is rooted in a substantial exodus of experienced IRS workers since the beginning of the previous administration.
Many customer service staff, who were initially prevented from accepting buyout offers until after the filing deadline last year, have since departed the agency. The IRS commenced the 2025 fiscal year with approximately 102,000 employees but concluded it with around 74,000 following a series of firings and layoffs spearheaded by the Department of Government Efficiency. This reduction in workforce capacity could impact service levels and processing times for some taxpayers.
Understanding Refund Timelines and Processes
For those filing electronically, the IRS advises that refunds should typically be processed within 21 days or less. Opting for direct deposit can potentially speed up this process further, getting funds into bank accounts more swiftly. Conversely, paper returns could take four weeks or more to process, and any necessary amendments or corrections will extend this timeframe considerably.
The IRS strongly cautions taxpayers against relying on receiving a refund by a specific date, especially when planning for significant purchases or essential bill payments. Variability in processing times means that while many will receive refunds promptly, others may experience delays.
How to Track Your Refund Status
To monitor the status of a refund, taxpayers can utilise the IRS's online "Where’s My Refund?" tool. This service provides updates within 24 hours of e-filing confirmation and typically within four weeks for paper returns. The tool will also offer projected deposit dates for most early filers claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) by February 21.
Information on this platform is updated once daily, overnight. Access requires your Social Security Number or Individual Taxpayer Identification Number (ITIN). Alternatively, taxpayers can use the official IRS2Go mobile application or an IRS Individual Online Account to check their refund status conveniently.
The Nature of Tax Refunds and Key Credits
Tax refunds are fundamentally issued when an individual has paid more tax throughout the year than they ultimately owe, often due to withholding from wages. Even without an overpayment, a refund may still be due if one qualifies for a refundable credit, such as the EITC or Child Tax Credit. To receive any refund, a tax return must be filed, and there is a standard three-year window to claim it from the original filing deadline.
Important Changes for the 2026 Filing Season
The IRS anticipates that most refunds for the Earned Income Tax Credit, Child Tax Credit, and Additional Child Tax Credit will be deposited into bank accounts or loaded onto debit cards by March 2 for those opting for direct deposit. Some taxpayers may receive their refunds sooner, depending on their financial institution's processing times.
A notable administrative change this year is that most taxpayers must provide their routing and account numbers for direct deposit. This follows the IRS's decision to phase out paper tax refund cheques, which began on September 30 in accordance with an executive order. This move aims to streamline the refund process and enhance security, though it requires taxpayers to have banking details ready when filing.
As the filing season progresses, taxpayers are encouraged to file accurately and electronically where possible, to utilise direct deposit for speedier refunds, and to monitor their refund status through official IRS channels to stay informed about their expected payment timeline.
