The Internal Revenue Service (IRS) anticipates a staggering 164 million tax returns will be submitted by the April 15 deadline this year. Analysts have projected that average refunds could be approximately $1,000 higher compared to last year, largely attributed to recent modifications in tax legislation. Last year, the average refund amount stood at $3,167, indicating a significant potential increase for taxpayers in the current filing season.
Processing Timelines and Delays
For individuals filing electronically, the IRS states that refunds should typically be processed within 21 days or less. Opting for direct deposit can further expedite this process, offering a quicker route to receiving funds. However, paper returns are subject to longer wait times, potentially taking four weeks or more to process. Any necessary amendments or corrections to a tax return will inevitably extend these timeframes, adding to potential delays.
Critical Holds on EITC and ACTC Refunds
Taxpayers who have claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) must be particularly cautious. By federal law, the IRS is prohibited from issuing refunds that include these credits before mid-February. This restriction applies to the entire refund amount, not merely the portion associated with the claimed credit. Consequently, refunds encompassing EITC or ACTC credits are expected to be deposited into accounts or loaded onto debit cards by March 2 for those who have selected direct deposit as their preferred method.
Agency Warnings and Tracking Tools
The IRS strongly advises against relying on receiving a refund by a specific date, especially when planning for major purchases or essential bill payments. To help taxpayers monitor their refund status, the agency provides several digital tools. These include the Where's My Refund? online tool, the IRS2Go mobile application, and the IRS Individual Online Account platform. Utilizing these resources can offer real-time updates and reduce uncertainty during the waiting period.
In summary, while many taxpayers may see higher refunds this year, patience is required due to processing delays and legal holds on certain credits. Planning accordingly and using available tracking tools is recommended to manage expectations effectively.
