The IRS announced this month that most Americans should receive their refunds within 21 days of filing – with some exceptions. Due to regulations designed to prevent fraud, claiming the Earned Income Tax Credit will slow down your tax return. As a result, people who claim this credit and file their returns on January 24 or close to that date may not receive their refund until early March, according to the IRS.
The reason for this is due to The Protecting Americans from Tax Hikes Act of 2015 that slows refunds for persons who claim these benefits. The regulation was enacted to target fraudsters who use identity theft to steal taxpayer refunds.
Although the IRS claims that most refunds would be issued within 21 days, experts caution that delays are inevitable due to the agency’s ongoing work on 2020 tax returns.
Despite the fact that some people prefer to file paper returns and others have no choice, the IRS claims that taxpayers who file electronically are more likely to have their returns processed fast. Last year, approximately 10 million persons filed paper forms, accounting for about 7% of the 148 million returns filed in 2021. Experts advise people to join the 138 million taxpayers who already use electronic filing.
The IRS also advises taxpayers to set up direct deposit for their refunds. The quickest way to obtain your money, according to the agency, is to employ a combination of e-filing and direct deposit, which transfers the money directly to your bank account. Last year, around 95 million customers received refunds, with approximately 87 million opting for direct deposit. According to the IRS, most taxpayers who file electronically and choose direct deposit will get their refund within 21 days, assuming there are no issues with the return.