The Internal Revenue Service announced that the nation’s tax season will begin on Friday, February 12, 2021, when the tax agency will start receiving and processing 2020 tax year returns.
NOTE: The Covid stimulus payments you received in 2020 (and the second check whether you received it in 2020 or 2021) will NOT decrease your tax refund.
The February 12 begin date for individual tax return filers allows the IRS time to do extra programming and testing of IRS systems following the December 27 tax law changes that give a second level of Economic Impact Payments and other advantages. To fast refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the data they need.
Overall, the IRS anticipates nine out of 10 taxpayers will accept 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 time lags in the procedure, people should avoid filing paper returns wherever possible.
Why so late this year?
The agency said it is taking the time to do additional programming and testing of its systems to ensure that there won’t be a delay in issuing refunds following tax law changes from the stimulus package that was passed in December. The law had included a second round of stimulus checks, or Economic Impact Payments, and other benefits.
Tips for taxpayers to make filing smooth
For those who may be eligible for stimulus payments, they should carefully review the rules for the Recovery Rebate Credit. Most people accepted Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any updates about their payments when they file. However, those who didn’t receive a payment or only received a partial payment may be qualified to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.