Here’s how long it will take to get your tax refund in 2022

Three-quarters of all Americans receive an annual tax refund from the IRS, which is often a family’s biggest check of the year. But with this tax season now open, taxpayers could see a repeat of last year’s grunts in processing, when about 30 million taxpayers had their returns — and refunds — withheld by the IRS.

Treasury Department officials warned Monday that this year’s tax season will be a challenge with the IRS beginning to process returns Jan. 24. This is largely due to the IRS’ large backlog of returns from 2021. As of December 31, the agency had 6 million unprocessed individual returns — a significant reduction from a backlog of 30 million in May , but much higher than the million unprocessed returns that is more typical at the start of tax season.

That may make taxpayers nervous about delays in 2022, but most Americans should get their refunds within 21 days of filing, the IRS said this month — with some caveats. Claiming the earned income tax credit or the child tax credit will slow down your tax filing due to regulations designed to deter fraud, but it does mean that people who claim these credits and filed their returns on the 24th January or a date close to this date may not receive their reimbursement. until early March, the IRS said.

And other issues can slow down your refund, such as errors such as math problems or incorrect reporting of the amount you received from advanced child tax credit payments. In these cases, your tax return could be flagged, causing delays of weeks or even months.

However, some taxpayers may inadvertently claim the wrong amount on their tax returns this year – and through no fault of their own. The IRS said on Monday that some of its child tax credit letters – letter 6419 – included incorrect information on the amount that some taxpayers received. The IRS asks taxpayers to refer to the letter when filing their tax returns.

But if that happens, that taxpayer’s return may not match what the IRS has on file, causing the return to be flagged – and delays in processing their return and sending their reimbursement, said Larry Gray, CPA liaison and government relations for the National Association of Tax Professionals.

“People may not realize the letter may be wrong, and what is the IRS doing to send follow-up communication to stop creating a bigger backlog in the upcoming season?” he said on a conference call to discuss tax professionals’ concerns about the current tax season.

If all goes well, however, taxpayers who file electronically can receive their refunds by direct deposit as quickly as one week after filing based on processing times from previous years, according to trade publication CPA Advisor. Importantly, processing time typically slows as tax season begins and the IRS handles more returns, he noted.

Ongoing backlog

In the meantime, tax experts say there are steps taxpayers can take to ensure a quick tax refund, which is even more important this year given the IRS is starting with a backlog. On Wednesday, National Taxpayers’ Advocate Erin M. Collins released a report to Congress that warned her that she was “deeply concerned about the upcoming filing season” given the backlog, among other issues.

“The first thing you know if you’re going to cook a meal, you have to have the kitchen cleaned from the last meal,” said Mark W. Everson, Alliantgroup vice chairman and former IRS commissioner. “It snowballs into a terrible situation.”

Delays in processing tax returns are among the agency’s most pressing issues, Collins said in his report, which describes an agency in crisis.

‘Weeks and weeks’ of IRS delays

Although the IRS says most refunds will be sent within 21 days, experts warn that delays are likely, noting that the agency is still working on 2020 tax returns.

In the 2020 budget year, the IRS processed more than 240 million tax returns and issued about $736 billion in refunds, including $268 billion in federal stimulus payments, according to the latest data from the IRS. IRS. During this period, approximately 60 million people called or visited an IRS office.

Donald Williamson, a professor of accounting and tax at the American University in Washington, said he expects “weeks and weeks” of IRS delays in 2022. “My advice in 2022 is to file early, start tomorrow and try to settle your taxes with a qualified professional.”

Complicating the challenge, tax preparers told CBS MoneyWatch that it remains difficult to reach IRS staff by phone. The IRS only responded to about 1 in 9 taxpayer calls in fiscal year 2021, Collins reported. “Many taxpayers are not getting their questions answered and are frustrated,” she noted.

“Before, you waited 5 to 10 minutes and got an IRS agent on the phone,” said Christian Cyr, CPA and president and chief investment officer at Cyr Financial. But now, he said, his CPAs wait hours to speak to an IRS employee, with no guarantee of ever reaching one.

Ensuring a smooth tax return involves a lot of stakes, given that the average refund last year was around $2,800. Below are tips from tax experts and the IRS on how to get a tax refund within 21 days of filing.

1. File electronically

It’s a step the IRS is urging this year. Although some people just like to file returns on paper — and others have no choice — the agency says taxpayers who file electronically are more likely to have their returns processed quickly.

This is because the IRS relies on computers to process electronically filed returns, while paper returns must be processed by human employees. In the early days of the pandemic, the IRS closed its offices and employees stopped opening the mail, which delayed the processing of paper returns.

Even aside from strains on employees due to the pandemic, IRS staffing has not kept pace with population growth. The agency’s workforce is today at the same level as in 1970, despite a population growth of 60%. This means fewer workers to handle a larger volume of returns.

About 10 million people filed paper returns last year, or about 7% of the 148 million returns filed in 2021, according to data from the Taxpayer Advocate Service. Tax experts are urging people to join the roughly 138 million taxpayers already using e-filing.

“The paper is the kryptonite of the IRS, and the agency is still buried there,” National Taxpayer Advocate Collins said Wednesday.

2. Get a refund by direct deposit

The IRS also recommends that taxpayers arrange to get their refunds by direct deposit. The agency says the fastest way to get your money is to combine e-deposit with direct deposit, which sends the money to your bank account.

About 95 million people received refunds last year, of which about 87 million opted for direct deposit. Most taxpayers who file their return electronically and choose direct deposit will receive their refund within 21 days, assuming there are no issues with the return, according to the IRS.

3. Don’t estimate

The IRS checks its data against the figures detailed by taxpayers in their returns. If there is a discrepancy – say your W2 shows you earned $60,000, but you write on the statement that you earned $58,000 – the statement is flagged for manual review by an employee.

Once this happens, your tax return will likely be delayed for weeks or even months. That’s why tax experts advise people to check forms carefully to make sure they’re reporting data accurately. Filing your tax return shouldn’t rely on “word of mouth or the honor system,” Cyr said. “I guarantee you it will cause delays.”

4. Record IRS letters on stimulus, CTC

Along these lines, the IRS is sending letters this month to taxpayers who received the third federal stimulus check in 2021, as well as the advance Child tax credit payments.

These letters will tell each taxpayer what they received through these programs in 2021 – these are important records to keep as you will want to refer to these amounts when completing your tax return.

One of the main reasons tax filings were delayed in 2021 is because taxpayers made mistakes reporting their 2020 stimulus payment amounts on their returns, which resulted in their tax returns being flagged. for manual review.

“Have no trouble caused by your own negligence,” Everson advised.

However, due to incorrect CTC letters that have been sent to some taxpayers, the IRS advises taxpayers to double-check the amount they received by logging into their accounts at IRS.gov.

The IRS will send two letters:

  • Letter 6419 — informing taxpayers of their CTC advance payments. The agency began sending these letters in December and will continue to do so in January.
  • Letter 6475 – about the third stimulus check. This letter will be sent at the end of January.

Keep both of these letters and refer to them when filing your tax return, tax experts said.

You may face a delay if you claim these tax credits

A few issues can cause delays, even if you do everything right.

The IRS notes that it cannot issue refunds involving Earned Income Tax Credit (EITC) or Child Tax Credit until mid-February. “The law provides this additional time to help the IRS prevent fraudulent refunds from being issued,” the agency said this week.

This means that if you file as early as January 24, you still may not receive a refund within the 21-day period if your tax return involves either of these tax credits. In fact, the IRS advises those claiming these credits that they will most likely receive their refunds in early March, assuming they filed on or around January 24.

The reason has to do with a 2015 law that slows refunds for people claiming these credits, which was designed as a measure to curb fraudsters who rely on identity theft to recover refunds from taxpayers.

—With Associated Press reporting.

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