Tax refunds going out much more slowly
Virus-related shutdowns still in play; average amount sent back is down, too
refund checks are flowing into pocketbooks — and the overall economy — at a much slower pace so far in February.
The IRS reported Thursday that the total dollar amount of tax refunds was down 59.2 percent through Feb. 19 — just one week after the IRS began processing returns. That’s the latest data available.
Nearly $47.4 billion in refunds has been issued so far this year, a far cry from the more than $117 billion issued through Feb. 21, 2020.
The slowdown reflects the fact that the IRS was not dealing with coronavirus-related shutdowns in January and February last year, which continue to slow operations this year. And the IRS also kicked off its tax season later than usual this year.
The average refund issued so far this year is $2,880 — down 7.8 percent from $3,125.
But the pace could pick up. Still, many remain concerned that the IRS is going into an extremely challenging year, considering that the agency
was still dealing with 6.7 million 2019 returns that had not been processed as of Jan. 30.
Some of this falloff in pace is to be expected after essentially a two-week delay to the season’s kickoff.
The IRS started processing tax retax
turns at a much later date than usual, noting that it needed the extra time to program its systems to reflect new tax rules that were signed into law Dec. 27. Plus, the IRS has been busy sending out the second round of Eco
nomic Impact Payments in January.
A year ago, the IRS began processing 2019 tax returns Jan. 27.
Nearly 38 percent fewer returns were processed through Feb. 19, what the IRS called Day 8 of the 2021 filing season, compared with the same time frame last year.
The IRS reported that 29.8 million returns were processed through Feb. 19 — a week after the agency began accepting them. That’s down from 48.1 million returns that were processed through Feb. 21 last year.
Last year’s numbers, though, take into account that the IRS had more time to process returns. The IRS noted that last year’s numbers were tallied on Day 26 of the filing season.
The amount of returns received so far by the IRS has fallen, too, compared with a year ago.
The agency had received nearly 49.9 billion returns through Feb. 21 last year. But that number has dropped by 30.5 percent so far this year to nearly 34.7 million through Feb. 19.
The IRS is urging taxpayers to take some simple steps to avoid a variety of pandemic-related issues, such as making sure to electronically file a tax return and requesting direct deposit of refund money.
Taxpayers have until April 15 to file their 2020 tax return and pay any tax owed.
The IRS expects to receive more than 160 million individual tax returns this year. About 90 percent of tax returns are electronically filed. About 80 percent of taxpayers provide banking information for direct deposit of their refunds.