This is the time of year when millions of Americans eagerly await their tax refunds. The average refund was more than $2,500 last year, and the extra money can be particularly helpful if you’ve been dealing with financial challenges due to COVID-19. Some key changes may affect the size and timing of your refund this year. The IRS didn’t start accepting tax returns until Feb. 12 — rather than the usual late January — because it needed extra time to prepare for tax law changes from the Dec. 27 relief package. Taxpayers who file paper returns may get their refunds even later than usual because of delays related to the pandemic. And some people will get an extra refund if their income dropped or they had a baby and hadn’t received their full stimulus payment yet.
When Should I Expect My Tax Refund?
It depends on how you filed your tax return. You’ll get the money fastest if you file electronically and have the refund deposited directly into your bank account. “If you e-file with direct deposit, the IRS expects to issue nine out of 10 tax refunds within 21 days of acceptance,” says Lisa Greene-Lewis, CPA and tax expert with TurboTax. The IRS usually accepts your return within 24 to 48 hours of e-filing, she says.
Filing electronically sooner rather than later is also a good way to protect against tax refund identity thieves. “The fastest and safest way is for taxpayers to file electronically and have their refund direct deposited into their bank account,” says Mark Steber, Jackson Hewitt’s chief tax information officer. “Filing electronically not only helps protect against identity theft and tax refund theft, but it also means taxpayers will get their refund sooner.”
You can include your bank’s routing number and your account number on your Form 1040, or you can submit Form 8888 with your tax return specifying up to three bank accounts to split up your refund for direct deposit. You can also use that form if you want to purchase savings bonds with some or all of your refund money.
If you e-file but opt for a paper check, it usually takes about a month to receive your refund, says Barbara Weltman, author of J.K. Lasser’s 1001 Deductions & Tax Breaks 2021. It usually takes about two months to receive your refund if you file a paper return and request a paper check, she says, although processing of paper returns had been delayed significantly last year because of COVID-related shutdowns.
How Do I Check My Refund Status?
It’s easy to check the status of your refund by using the IRS’ Where’s My Refund tool. Input your Social Security number, your filing status and the exact dollar amount of the refund from your tax return. You can check on the status of your refund 24 hours after e-filing, or four weeks after you mail a paper tax return. The Where’s My Refund tool will let you know if your return has been received, the refund has been approved or the refund has been sent. The IRS updates the information daily.
Why Is My Refund Delayed?
Your refund may be delayed if you claimed the Earned Income Tax Credit or Additional Child Tax Credit. The IRS takes extra time to scrutinize tax returns claiming these credits because of fraud problems in the past. The IRS expects taxpayers who filed electronically and claimed those credits to start to receive their refunds by mid-March this year, says Weltman.
Your refund may also be delayed because of incomplete information on the return or mistakes, such as transposing numbers or math errors, or if the income you report doesn’t match up with the 1099s and W-2s the IRS received, says Greene-Lewis.
“Another thing that can derail a refund is to opt for direct deposit into an account that doesn’t match the taxpayer’s — such as a bank account for one spouse when the return is joint,” says Weltman. “The IRS may send a paper check in this instance, which takes more time.”
How Can I Get My Refund Quicker in the Future?
You’ll get your refund faster if you file electronically and have the money direct deposited next time. The sooner you file your return, the faster you’ll get your refund — and the less likely that a tax identity thief will claim the money before you do.
And you can start to get the money even faster if you adjust your tax withholding on Form W-4 and have less money set aside from your paychecks for taxes and more money in your take-home pay. “People who are getting huge refunds with no changes expected in their 2021 tax liability are good candidates to adjust their withholding,” says Michelle Morris, a certified financial planner and enrolled agent with BRIO Financial Planning in Quincy, Massachusetts.
You can use the IRS’ Tax Withholding Estimator to help calculate whether you should have more or less money withheld from your paychecks for taxes. You can then submit a new W-4 to your employer to adjust your withholding, and you could receive more money in your paychecks right away. Morris recommends saving the extra money before you get used to having it. “I recommend putting the excess into a savings account, with the auto-transfer occurring the day the paycheck lands so you never ‘see’ it in the bill-paying account,” she says.
Review your withholding again if you have any life or income changes so you don’t have a surprise at tax time next year.
More from U.S. News
Update 03/02/21: This story was published at an earlier date and has been updated with new information.