The nation’s tax season will start
on Friday, February 12, 2021.
There are steps to help speed refunds during the COVID-19 pandemic.
The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.
This programming work is critical to ensuring IRS systems run smoothly. If the filing season opened without the correct programming in place, there could be a delay in issuing refunds. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.
To speed refunds during the pandemic, you should file electronically with direct deposit as soon as you have the information you need. Tax software companies are accepting tax returns now, but the returns will not be transmitted until the IRS start date of February 12.
Last year’s average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline.
Under the PATH (Protecting Americans from Tax Hikes) Act of 2015, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.
If you will receive an EITC or ACTC refund and you file electronically with direct deposit and there are no issues with your tax return, the IRS anticipates you will receive your refund the first week of March. This would be the same experience if the filing season opened in late January. Check Where’s My Refund on IRS.gov for your personalized refund date.
Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of filing electronically with direct deposit if there are no issues with their tax return. To avoid delays in processing, you should avoid filing paper returns wherever possible.
Tips for Taxpayers To Make Filing Easier
Follow these simple steps to speed refunds and help with your tax filing:
- File electronically and use direct deposit for the quickest refunds.
- Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call the IRS or your tax professional.
- If you are eligible for a stimulus payment, you should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically. If you received the maximum amount, you do not need to include any information about your payments when you file. However, if you didn’t receive a payment or only received a partial payment, you may be eligible to claim the Recovery Rebate Credit when you file your 2020 tax return.
- Remember, advance stimulus payments received separately are not taxable, and they do not reduce your refund when you file in 2021.
Key Filing Season Dates
There are several important dates you should keep in mind for this year’s filing season:
- January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
- February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
- February 22. Projected date for the IRS.gov Where’s My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.
- First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.
- April 15. Deadline for filing 2020 tax returns.
- October 15. Deadline to file for those requesting an extension on their 2020 tax returns.
Filing Season Opening
The filing season-opening date follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with the tax software industry.
Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time. This later start date is intended so taxpayers can get their needed tax refunds quickly and to ensure they receive any remaining stimulus payments they are eligible for as quickly as possible.
A Final Note
To facilitate the timely filing of your return, gather your tax documents now before you schedule an appointment with your tax professional. You can download a checklist from this website to help you prepare for your tax appointment. Under the “Resources” tab, click on Tax Resources/Tax Appointment Checklist.
As the coronavirus rages on, know that many tax professionals can accommodate your tax filing needs virtually.
Stay safe. Stay well. Stay home.
Bayshore CPA’s, P.A. are your local Certified Public Accountants
and Tax Resolution Specialists conveniently located
in Mooresville, North Carolina
Image: ID 47000898 © Sebast1an | Dreamstime.com