(Bloomberg) -- The tax filing season will open on Feb. 12 this year, about two weeks later than normal, according to the Internal Revenue Service.
Delaying the day tax returns will start being accepted is necessary to allow the IRS time to update and test its systems following the late-December stimulus law that approved a second round of stimulus payments and other tax benefits, the agency said in a statement Friday. The filing deadline will still be April 15, as usual.
“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,” according to the IRS statement. “These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.”
A later start date means some refunds will be delayed, at a time when they’re extremely important to taxpayers, said Mike Dolan, national director of IRS policies and dispute resolution at KPMG LLP and a former deputy commissioner at the agency.
This tax filing season will be particularly consequential because individuals who have yet to receive some or all of their $1,200 stimulus payments from the March 2020 Cares Act or the $600 stimulus payments approved in December will be able to claim that money on their return and receive it in the form of a tax refund. The payments could help bolster household income and savings rates that have fallen recently as previous fiscal assistance faded and the coronavirus pandemic continued to rage.
More Taxes
Some taxpayers may also find that they owe more taxes than usual. Expanded unemployment benefits claimed last year by millions of jobless Americans are taxable, and many states do not withhold income taxes when they issue the payments.
House Ways and Means Committee Chairman Richard Neal, a Massachusetts Democrat, said in a statement that he is “disappointed” to learn the tax filing season will begin later than usual.
Still, he said it was “encouraging” that refundable tax credits can start going out the first week of March.
By law, the IRS must hold refunds for taxpayers claiming the earned-income tax credit or the additional child tax credit that was approved until at least mid-February, so that they can go through additional fraud checks.
The average tax refund in 2020 was $2,535, according to IRS data. The agency said that it issues most tax refunds within three weeks and that filing electronically, rather than on paper, is the fastest way to receive any refund due.
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