The IRS announced that tax season will start on Friday, Feb. 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. Taxpayers can work with tax professionals and start filing returns; however, tax returns won’t be transmitted to the IRS until Feb. 12. April 15, 2021, remains the current deadline for filing 2020 returns. Some speculate that the IRS will push the date back to July 15, 2021, like last year. NATP will report if this happens.
The Feb. 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the Dec. 27 tax law changes that provided a second round of economic impact payments (EIP) and other benefits.
This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a recovery rebate credit when they file their 2020 tax return.
The IRS began accepting business tax returns on Jan. 8, 2021.
IRS encourages e-filed returns
To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15, deadline.
Under the PATH Act, the IRS cannot issue a refund involving the earned income credit (EIC) or the additional child tax credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.
The IRS anticipates a first week of March refund for many EIC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where’s My Refund for their personalized refund date.
Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.
Key filing season dates
There are several important dates taxpayers should keep in mind for this year’s filing season:
- Jan. 15: Tax professionals can begin filing returns using their tax software. Tax returns will be transmitted to the IRS starting Feb. 12.
- Feb. 12: IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
- Feb. 22: Projected date for the Where’s My Refund tool being updated for those claiming EIC and ACTC.
- First week of March: Tax refunds begin reaching those claiming EIC and ACTC for those who file electronically with direct deposit and there are no issues with their tax returns.
- April 15: Deadline for filing 2020 tax returns.
- Oct. 15: Deadline to file for those requesting an extension on their 2020 tax returns.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.