Tax professionals are peppered with questions about when people can file their returns and how soon they can receive a tax refund every year as the calendar flips over to January. The answers depend on a few factors, such as when you receive important tax documents, and filing early doesn't necessarily mean that you'll receive your refund any sooner.
There are a few dates you can count on all the same. The Internal Revenue Services (IRS) typically announces them no later than the second week in January for the upcoming filing season, but they can be subject to adjustment as the year goes on.
Collect Your Income Documents
Your employer had until February 1, 2021, to send you your W-2 form reporting your 2020 earnings. Most 1099 forms must be sent to independent contractors by this date as well. This deadline typically falls on January 31, but it was bumped to the next business day—a Monday—in 2021, because January 31 fell on a Sunday.
Reach out to your employer and request a copy or a duplicate copy if you haven't received your W-2 form. You can also call the IRS for assistance at 800-829-1040 if that doesn't work.
You can file IRS Form 4852, a W-2 substitute, if the tax-filing deadline is looming and you still don't have your W-2, but this can be a bit of a headache. You'll have to accurately calculate your earnings and withholding amount based on your final pay stub for the year, so you might want to reach out to a tax professional if you find yourself in this situation.
Does My Stimulus Payment Count as Income?
The IRS stated in May 2020 that the economic impact payments provided to Americans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further legislation are not taxable income. You don’t have to give any portion of that money back to Uncle Sam, and it won’t reduce your refund if you have one coming to you.
Stimulus payments aren't considered income for other purposes, either, such as eligibility for government benefits or assistance.
Many state governments, including New Jersey and Massachusetts, have indicated that they’re not taxing these stimulus payments, either. You most likely won’t have to report the payment you received on your state tax return, but check your state’s website or confer with a local tax professional to be sure.
The American Rescue Plan Act (ARPA), signed into law in March 2021, provides that up to $10,200 of unemployment benefits received in 2020 are exempt from taxation as well, at least for those earning up to $150,000. Some states have conformed to this ruling and won't tax your benefits, either. Others will continue to do so. Check with your state to find out where yours stands.
The ARPA provision for unemployment is helpful for those who collected up to an $600 more per week in unemployment benefits. Those who filed their return before the ARPA was enacted don't have to trouble themselves with filing an amended tax return. In fact, the IRS asks you not to. The IRS has indicated that it will recalculate all 2020 tax returns that reported unemployment compensation income, and that it will issue any resulting refunds in the spring and summer of 2021.
As for your state tax return, you'll most likely have to report it, but you’ll want to check with your state’s taxing authority to be sure.
When Tax Filing and Processing Begins
The IRS began accepting and processing 2020 tax returns on February 12, 2021—about three weeks later than the usual date, which is typically sometime during the last week of January. The agency indicated that it needed time to address tax law changes that went into effect on December 27, when the government provided additional benefits in response to the coronavirus pandemic.
Most tax professionals and tax software companies, including those with the IRS Free File program, will prepare your tax return immediately if you have all your income documents in order.
The Tax Filing Deadline
The IRS extended the tax filing deadline from April 15 to May 17 in 2021. This provision only applies to individuals, not corporations. It means that payments aren't due until May 17, either, with the exception of estimated tax payments. They're still due on April 15.
Residents of Texas and surrounding states that were declared to be winter storm disaster areas have even more time to file their tax returns, until June 15, 2021.
Those living in other states can request a six-month extension from the IRS, pushing the filing deadline back to October 15 of this year, if they're not ready to prepare and file their tax return by May 17. It’s a simple matter of filing Form 4868 rather than a tax return by that date.
Payment of any taxes you owe for the year are still due by the May deadline, however. The IRS will charge interest and sometimes late payment penalties if you don't pay by then.
When Will You Receive Your Refund?
The IRS has historically said that it issues refunds in less than 21 days for most returns, but it can take up to six weeks if you mail in a paper return. It advises you to add another estimated 10 days to allow for the postal delivery process if you're requesting a paper check for your refund rather than direct deposit.
It Can Depend on the Tax Credits You Claim
The Protecting Americans from Tax Hikes Act of 2015, commonly known as the "PATH Act," began delaying some refunds in 2017.
The IRS isn't permitted to issue your refund before mid-February, regardless of when you file your return, if you're expecting a refund because you claimed the earned income tax credit (EITC) or the refundable portion of the child tax credit. The PATH Act provides that the IRS needs time to examine returns claiming these refunds so it can prevent fraud.
You can check the status of your refund and get a more exact date after that time by visiting the IRS website.
You're still subject to this delay even if your refund is only due in part to the EITC or the child tax credit. The IRS won’t send you one refund for $1,000 and hold the EITC portion of your refund until the end of February if you overpaid $1,000 in taxes and are also entitled to a $1,000 EITC refund for a total of $2,000. Your entire refund will be delayed.
2021 Tax Planning
Filing and refund dates aren't the only deadlines that taxpayers have to concern themselves with. Certain payments and reporting requirements are sprinkled over the calendar year, and missing any of them could cause a headache when it's time to file again in 2022. Here are a few other deadlines you may want to keep in mind:
- Sole proprietors and independent contractors who aren't subject to tax withholding by an employer should make quarterly estimated payments on January 15, April 15, June 15, and September 15 of this year. The January 15, 2022, payment is especially important, because it's the last payment for the 2021 tax year. And presently, the April deadline has not been extended by the IRS.
- Employees who earn more than $20 in tips in the month of December 2020 should report them to their employers on Form 4070 by January 11, 2021, and every month going forward.
- The last day to make IRA contributions for the 2020 tax year has been extended to May 17, 2021.