Though some people who file a tax return discover they owe money after the fact, most of the time, the opposite holds true -- the typical filer is due a refund. And those refunds can be substantial. In 2020, the average tax refund amounted to $2,535.
If you're owed something in that vicinity, you'll no doubt want to get your money as quickly as possible. But how long will you have to wait?
When to expect your tax refund
The speed at which you'll get your refund will hinge on a number of factors, including whether you:
- File electronically or on paper
- Sign up for direct deposit
- Make an error on your return or with your bank account details
- Claim certain tax credits that are subject to extra scrutiny
The fastest way to get your refund is to submit an electronic return in conjunction with signing up for direct deposit. The IRS typically issues refunds for electronic returns within three weeks, and direct deposit could move things along even faster. On the other hand, it generally takes the IRS six weeks to issue refunds for tax returns filed on paper, so if you go that route, you could easily wind up waiting double the time.
This especially holds true this year. As of December, the IRS was still sitting on a massive backlog of unprocessed tax returns from 2020, and due to the pandemic, it may encounter its share of staffing issues this tax season, as well. Remember, unlike electronically filed returns, paper tax returns have to be processed manually, so if you file on paper this year, you could end up waiting more than six weeks -- especially if you also request a check in the mail.
Of course, if you make a mistake on your tax return, that could delay your refund, as well, as the IRS investigates. The same will hold true if you sign up for direct deposit but enter the wrong bank account details. In that case, your refund will generally bounce, and once the IRS gets that money back, it will issue you a check by mail. But as you might imagine, that process takes time.
Finally, there are certain tax credits that will automatically delay your refund if you claim them early in the season -- the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). Due to high levels of fraud associated with these credits -- which happen to be refundable, so they'll pay you money even if they knock your tax liability down to below $0 -- the IRS is required to withhold refunds associated with these credits for several weeks before they can issue that money. This year, due to the delayed start of the tax season, filers who claim the EITC or ACTC should not expect their refunds until March at the earliest.
Get moving to get your money sooner
Generally, the IRS begins accepting tax returns in late January, but this year, the agency delayed the start of the tax season until Feb. 12. However, if you file your return electronically on or around that date and sign up for direct deposit, you could be sitting on your refund by very late February or early March.
Once you've submitted your tax return, you can use the IRS' Where's My Refund tool to get an update on its status. You can generally start checking on your refund about 24 hours after submitting an electronic return, or four weeks after mailing one on paper. But either way, if you want to avoid a delay with your refund, get moving on your return as soon as you can.