Under the weight of staffing and workload challenges, tax season starts on Monday, Jan. 24, when Internal Revenue Service (IRS) will begin accepting and processing 2021 tax year returns. The deadline to submit 2021 tax returns or an extension to file and pay tax owed is April 18. Taxpayers requesting an extension will have until Monday, Oct. 17, to file.
Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year to expedite returns under challenging circumstances caused by the pandemic, say IRS officials. The traditional start date was pushed back so the tax agency could adequately prepare for the massive undertaking of the tax filing process.
Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. Some returns, filed electronically or on paper, may need manual review, which delays the processing, if the systems detect a possible error or missing information, or there is suspected identity theft or fraud.
The IRS urges that people who received an Economic Impact Payment or an advance Child Tax Credit last year to make sure they report the correct amount on their tax return to avoid delays. Recipients will receive special letters, and they can also check amounts received on IRS.gov.
In a statement, IRS Commissioner Chuck Rettignoted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig said.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of Dec. 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
To avoid processing delays and expedite returns, organize and gather 2021 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, and this year’s Identity Protection Personal Identification Numbers valid for calendar year 2022. The IRS also encourages people to use online resources before calling, and avoid paper returns.
Last year’s average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed.
By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on Jan. 24. The law provides this additional time to help the IRS stop fraudulent refunds from being issued.
The IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.