Has the IRS already started refunding tax return 2021?
Millions of Americans have already received refund payments after completing their filing, but there are concerns that the process could soon face delays.
This year’s tax season is expected to be a bumper year for tax refunds and rebates with millions of Americans expecting to get money back after their filing. Those who suffered a loss of income during the pandemic may be due to receive some financial relief while many are claiming missing stimulus check payments in the form of a Recovery Rebate Credit.
But there could be a slightly longer wait than usual with the tax authority receiving a huge rush of early tax returns. Despite this they have managed to send out a considerable number of tax refunds already. Here’s what we know so far about tax refunds 2021.
IRS has already sent over $8 billion in tax return refunds
New data released by the IRS shows that as of 28 February 2021, they had managed to make a total of 28,301,000 tax refund payments. The total cost of these payments was over $85.4 billion, with the average recipient getting a tax refund worth $3,021.
The vast majority of these payments were sent out in the form of a direct deposit into a bank account, with over $83 billion already distributed. The average refund for direct deposit recipients was $3,061, slightly higher than the national average.
With over 28 million refunds already processed it suggests the IRS are doing a fairly good job of processing the returns once they receive them. By the end of February they had received around 46 million tax returns and had already processed close to 40 million, a rate of 87%.
The data released by the IRS compares the first 15 days of tax season 2021 to the first 33 from the previous year. However it does appear that the speed of processing the tax refunds has quickened slightly this time around.
Currently the IRS is sending out refunds at an average rate of $5.69 billion per day, while that figure for the first month of tax season 2020 was $4.23 billion per day.
Speed of tax returns refunds may begin to slow
Although there is little evidence yet of the increased workload having any significant effect on the IRS tax filing procedure, that could change in the coming weeks. Congress appears to be moving towards passing President Biden’s $1.9 trillion stimulus bill and that will bring with it a lot of extra work for the IRS.
The tax authority will also be charged with administering and distributing the third stimulus checks once they are signed into law and they will probably be treated as a priority. It is thought that over 150 million payments will be made and that will almost certainly have a knock-on effect on the tax returns process.
The IRS have so far refused to push back the tax return deadline, as they did last year, so they will likely be attempting to send both the tax refunds and stimulus checks at the same time for weeks.