How long will the IRS be sending tax refunds in 2021?
Millions are still waiting for their tax refund after the IRS has one of the busiest tax seasons in recent years. How long should it take to get yours?
This tax season has been busy for the Internal Revenue Service (IRS). With the passage of the American Rescue Plan in March, the IRS had to adapt quickly to changes in the tax code which altered the amount that would be refunded. Additionally, the trillion-dollar stimulus package allocated funds for the sending of a third stimulus check which the tax authority began distributing right as the majority of taxpayers began filing.
For those who submit a paper tax return, getting a refund normally takes between six to eight weeks. However, with changes to the tax code, the sending of stimulus checks, and more people filing returns this year, the IRS has said that delays are expected. For those who file electronically, “your refund should be issued in less than three weeks, even faster when you choose direct deposit.”
This year, the IRS has also reported an increase in fraud, slowing down the distribution of tax refunds as a tax specialist reviews the return. If your return has been flagged for fraud, the IRS will notify you and ask that you provide additional information.
It is hard to estimate how long the organization will be sending returns because, as reported this Spring, they are still working through some returns from 2019. When the pandemic hit, just as tax season started to heat up in 2020, the IRS closed its doors, leaving a large backlog of paper returns that they are still trying to get through.
When will I get my adjusted return?
Some taxpayers who received unemployment benefits this year may be entitled to a larger tax refund because of the changes made to the amount of benefits taxed this year. The American Rescue Plan allowed the first $10,200 benefits earned in 2020 to be subtracted from the total amount received, meaning that those who filed their taxes before the bill's passage could receive an additional check from the IRS.
On 4 June, the IRS announced that they had sent 2.8 million corrected returns to those eligible. Throughout the summer, the agency will continue to process refund corrections, starting with “simplest returns” then moving on to more complex ones. When making this announcement, the IRS also stated that they would be adjusting returns for those tax credits impacted by the American Rescue Plan, including the Earned Income Tax Credit, Premium Tax Credit, and Recovery Rebate Credit.
Child Tax Credit
Before the passage of the American Rescue Plan, families who qualified for the Child Tax Credit were given the funds with their tax refund. This year, the amount of money associated and the way the funds are distributed have changed. Starting on 15 July, families with children up to seventeen will receive monthly payments.
For children under six, $300 per child will be sent, and for those between the ages of six and seventeen, $250 can be expected. The payments will be sent around the 15th of each month through December. All in all, the credit is worth $3,000 or $3,600 depending on the age of each dependent. The payments that will be sent from July through December make up half of the value of the credit. The second half can be claimed by families when they file their tax return next year.