Tax season 2021 will begin on February 12 after the Internal Revenue Service (IRS) pushed back the usual late January start date to make sure the necessary systems are in place to process stimulus payments that need to be distributed.
But while some tax filers may be tempted to leave their paperwork untouched a little longer than usual, there is no suggestion that the April 15 deadline for filing 2020 tax returns will be extended as it was last year due to the pandemic. Indeed, for those who like to file early, the IRS points out that the best tax software companies, including its Free File partners, are accepting tax returns now, so that they’re ready to be passed on to the service on February 12.
Why is the tax season being delayed?
While President-elect Joe Biden has just revealed plans for a stimulus check 3, it is the delivery of the second round of stimulus checks, along with any outstanding payments to Americans from the first checks, that has caused the IRS to seek extra preparation time. The service said the changes it is making will ensure that those who are eligible will receive any remaining stimulus money they are due as a Recovery Rebate Credit when they file their 2020 tax return.
"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time," said IRS Commissioner Chuck Rettig. "Given the pandemic, this is one of the nation's most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible."
When will tax refunds be paid?
Given the later tax season start date, the concern among some might be that the delivery of tax refunds will be pushed back too. With coronavirus and job losses affecting millions of households across the US, tax refunds - which averaged more than $2,500 last year - are set to take on an even greater level of importance this year, particularly among those already using personal loans, credit cards, and maybe even payday loans to pay everyday bills.
However, reassuringly the IRS says that if taxpayers file electronically with direct deposit as soon as they have the information they need, 9 out of 10 taxpayers can expect to receive their refund within 21 days of filing, assuming there are no problems with the return.
With more than 150 million tax returns anticipated this year, and the vast majority set to be filed before the April 15 deadline, people are urged not to file paper returns if they want to avoid delays in processing.
