Early tax filers are eager to complete their taxes well in advance of the April 15 deadline, primarily to receive their tax refund promptly. Many individuals can expect to receive their federal income tax refunds by this week.
"For many individuals, this is the largest payment they will receive all year," stated IRS Commissioner Danny Werfel during a news briefing on Monday.
By Tuesday, those who filed early and claimed the earned income tax credit on their 2023 returns should expect to receive their federal income tax refunds this week.
Tax Refunds 2024: IRS to Send Money Today!
Earlier, the IRS revealed a target date of February 27 for when many early filers could anticipate receiving most refunds related to the federal earned income tax credit or the additional child tax credit under specific conditions.
According to the IRS, the outcome hinges on factors such as electronic filing, selecting direct deposit, and the absence of any other issues with the return. Regulations state that federal refunds cannot be issued by the IRS before mid-February if the return claims the earned income tax credit or the additional child tax credit.
It is necessary for the IRS to postpone the issuance of those tax refunds to prevent fraudulent claims at the beginning of the season. On Friday, the latest data on the tax season was released by the IRS.
The average amount of federal income tax refunds issued through February 16 was $3,207, as per the latest report. That represents a 2.1% increase from the average of $3,140 for the same time period last year, according to CBs News.
According to the most recent data, a higher number of refunds have been issued up to mid-February. In comparison, the average federal income refund stood at just $1,741 according to IRS data as of February 9. The amount decreased by 12.8% from an average of $1,997 as of February 10, 2023.
The IRS said the most recent data should encompass tax refunds associated with the earned income tax credit and the additional child tax credit. According to the PATH Act, the IRS is mandated to hold refunds until February 15 annually for individuals who claim the earned income tax credit or the additional child tax credit. This delay is intended to give the IRS more time to combat fraud.
In the previous year, the average federal income tax refund stood at $3,167 according to IRS data up to Dec. 29, showing a 2.6% decrease from the corresponding period in 2022. The IRS typically processes and issues over 90% of refunds in under 21 days. However, certain returns require more time for evaluation.
Comparing the start of this year's tax season to last year is a bit tricky due to the delayed launch of tax operations. The IRS started processing e-filed returns on Jan. 29, about a week later than last year's Jan. 23 start date. According to the IRS, the statistics for this tax season demonstrate a positive beginning, with all systems functioning smoothly.
As of February 16, the IRS has processed 34.5 million individual income tax returns, showing a 6% decrease compared to the same period last year. The IRS has received 34.74 million individual income tax returns, showing a 5.7% decrease from the previous year.
The IRS also has distributed approximately $67 billion in refunds to taxpayers, showing a 23.2% decrease compared to last year. The earned income tax credit plays a crucial role in boosting tax refunds for numerous lower and middle income working families, serving as a vital resource for covering necessities like heating bills, groceries, and rent.
Although February 27 is the target date, the IRS mentioned that "some taxpayers may receive their refunds a few days sooner."
How to Check Tax Refund Status?
It is recommended by the IRS for filers to use the "Where's My Refund?" tool at IRS.gov to find an individual's personalized refund date. The tool was anticipated to display a current status by February 17 for the majority of early filers who claimed the earned income tax credit or the additional child tax credit.
You can verify the status of your federal income refund 24 hours after e-filing your return for the current year. Make sure to have your Social Security or individual taxpayer ID number, your filing status, and the exact refund amount from your return.
The IRS is implementing enhancements to its online refund tool to provide more transparent updates, such as indicating if a response is required for a letter requesting more information. Per Fox Buxiness, the agency mentioned that banks may require additional time to process a direct deposit or provide a debit card. Several institutions do not handle payments during weekends or holidays.
The amount individuals receive when claiming the federal earned income tax credit can vary significantly depending on factors such as family size, income, and filing status. To qualify, you must have had employment or earned income in 2023.
In 2023, an eligible family with three or more qualifying children can receive up to $7,430 as the maximum earned income tax credit. The amount has increased from a maximum of $6,935 in 2022. Having one qualifying child can make you eligible for a federal credit of up to $3,995 in 2023.
In the previous year, approximately 23 million employees and their families were granted around $57 billion in the federal earned income tax credit by December 2023, as per IRS records. On a national scale, the typical sum received was approximately $2,541.
Michigan saw approximately 664,000 lower- to middle-income workers and families benefit from $1.7 billion in federal earned income tax credit following the submission of their 2022 federal tax return. Last year, the average amount of EITC received in Michigan was $2,587.
This year, Michigan families have an added incentive to file for both federal and state income tax returns if they qualify to claim the earned income tax credit. Michigan has updated its earned income tax credit calculation to now be 30% of the federal credit in 2023, a significant increase from the previous 6%.
