IRS News: 2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic

 IR-2021-16, January 15, 2021

WASHINGTON ― The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

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. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12.

"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time," said IRS Commissioner Chuck Rettig. "Given the pandemic, this is one of the nation's most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible."

Last year's average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline.

Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.

The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where's My Refund for their personalized refund date.

Overall, the IRS anticipates nine out of 10 taxpayers will receive 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 delays in processing, people should avoid filing paper returns wherever possible.

Tips for taxpayers to make filing easier

To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps:

• File electronically and use direct deposit for the quickest refunds.
   
• Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
   
• For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn't receive a payment or only received a partial payment may be eligible 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.
   
• Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer's refund when they file in 2021.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year's filing season:

• January 15. IRS Free File opens. Taxpayers can begin filing returns through Free File partners; tax returns will be transmitted to the IRS starting Feb. 12. Tax software companies also are accepting tax filings in advance.
   
• January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
   
• February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
   
• February 22. Projected date for the IRS.gov Where's My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.
   
• First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.
   
• April 15. Deadline for filing 2020 tax returns.
   
• October 15. Deadline to file for those requesting an extension on their 2020 tax returns

Filing season opening

The filing season open follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with tax software industry, resulting in the February 12 start date.

The IRS must ensure systems are prepared to properly process and check tax returns to verify the proper amount of EIP's are credited on taxpayer accounts – and provide remaining funds to eligible taxpayers.

Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

IRS News: Economic Impact Payments on their way, visit IRS.gov instead of calling

 WASHINGTON – The Internal Revenue Service today urged people to visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov.

 
The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, last week. 

The direct deposit payments may take several days to post to individual accounts. Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of Jan. 4, 2021, which is the official date funds are available.

Paper checks also began going out and will continue to be sent through January. Some people will be mailed debit cards in January, and the IRS urges people to carefully check their mail. Mailed payments will require more processing and mailing time. Those who reside abroad will have longer wait times for checks as disruptions to air travel and mail delivery in some countries will slow delivery.

The IRS emphasizes that there is no action required by eligible individuals to receive this second payment. The payments are automatic, and people should not contact their financial institutions or the IRS with payment timing questions.

Eligibility
Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Most people who have an adjusted gross income for 2019 of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.

Checking the status of a payment
Starting today, people can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov.

Payment not received or less than expected? Claim on 2020 tax return 
Payments started going out last week and will continue through mid-January. Direct deposit payments are being made first to those that have valid routing and account information on file for direct deposit purposes. Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active. By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active. While the IRS is exploring options to correct these payments, if you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return.

The credit is figured like the Economic Impact Payment, except that the credit eligibility and the credit amount are based on the 2020 tax year information, including income.

For people who received a partial Economic Impact Payment, they can take the Recovery Rebate Credit for any remaining amount they’re eligible for by completing line 30 of the 2020 Form 1040 or 1040-SR.

Changing bank account or mailing information 
The IRS cannot change payment information, including bank account or mailing information. If an eligible taxpayer does not get a payment or it is less than expected, it may be claimed on the 2020 tax return as the Recovery Rebate Credit. Remember, Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.

More information

For more information about Economic Impact Payments and the 2020 Recovery Rebate Credit, visit IRS.gov/eip. Starting next week, people can check the status of their payment at IRS.gov/GetMyPayment. For other COVID-19-related tax relief, visit IRS.gov/Coronavirus. 

Pre-Ack and Bank Product Season Readiness

 

Today marks the beginning of the tax season for those of you offering Pre-acknowledgement advances through our bank partners.  We have prepared a FAQ for you to review with common questions for our pre-ack product. 

If you haven’t enrolled to offer bank products yet, our partners are still open and accepting enrollment applications for all products. 

Once you have enrolled, check out our FAQ below for pre-ack advance products

How do I  apply for pre-ack inside of the return? 

On the main information, Select bank products and check the box for the appropriate bank (your active bank).  You will then visit the bank application and complete the necessary steps, including selecting advance and the taxpayers preferred disbursement.  Once that is completed you will efile the return. 

What is EFC reject 91?

EFC 91 is an EFC reject you will receive when the bank rejects the Pre-ack return.  To fix these rejects the print the ack report and search for the bank rejection, this will tell you what is the reject is and you can fix and resend. 

 

Business eFile end date

 We will stop accepting incoming e-files for business returns on Tuesday, December 22, 2020 @ 6:00pm EST. This is two business days in advance of the IRS e-filing shutdown, thus giving IRS and state agencies a window of time to provide acknowledgements (or, ACKS) back to you before the IRS shuts down e-filing completely on Saturday, December 26^th at 12:00Noon EST. To explain how this affects you:

• 2017 business returns: We will permanently shut down all 2017 EFC Services on Tuesday 22 DEC 2020 @ 6:00pm EST). If you still need to transmit 2017 returns, you should transmit them as soon as possible to receive ACKS before this deadline. After December 22^nd, no further acknowledgements will be received or delivered to clients; if you try to transmit a 2017 return, you will receive a "404 – Not Found" error.

• 2018 and 2019 business returns: After Tuesday, December 22, 2020 @ 6:00pm EST, 2018 and 2019 EFC will continue to return available IRS\State Acknowledgements until the IRS closes business operations on/around Saturday, December 26th, 2020 at 12:00 Noon EST. You will be able to receive outstanding ACKS once the IRS resumes business operations in January.

In addition to this e-filing shut down, the EFC will also stop all EFC reporting on Tuesday, December 22, 2020 @ 6:00pm EST. 

IRS News: IRS issues scam warning to EROs

 

The Internal Revenue Service today warned Electronic Return Originators of an identity theft scam targeting EFIN holders. Fraudsters posing as a “contractor” for the IRS may contact EROs, suggesting they are verifying or checking on the ERO’s EFIN acceptance letter. The scammers may request that the ERO email them a copy of the EFIN acceptance letter and provide a telephone number to call for questions. As with all scams, this one can evolve and the elements may change. EROs should remain vigilant and take steps to protect their identities and taxpayer data. EROs who receive contacts from individuals posing as the IRS should contact the Treasury Inspector General for Tax Administration at www.tigta.gov to file a complaint. EROs who received a contact and disclosed their acceptance letter should contact the e-Services help desk immediately.

NJ State News: Automatic Extension for 2020 CBT Returns for Certain Fiscal Tax Year Filers

 One of the changes resulting from the enactment of P.L. 2020, c. 118 (which was signed into law on November 4, 2020), was a change in the original due date of a Corporation Business Tax return to 30 days after the due date of the federal return. In general, this means that a return is due on the 15th day of the month following the due date of the federal return. This may impact some taxpayers' original due dates.

The 2020 Corporation Business Tax returns (Forms CBT-100, CBT-100U, BFC-1, BFC-1-F, and CBT-100S) are currently in the process of being updated to incorporate the new law's changes, which is delaying the start of the filing season.

Taxpayers with returns that have an original due date that falls anytime between November 15, 2020 and March 15, 2021, are granted an automatic extension to file their tax returns by April 15, 2021. A taxpayer will not be charged late filing penalties if the return is filed by April 15, 2021 (the extended due date). This extension applies only to the filing of the return and does not extend the time to make all required payments. (Note: If a due date falls on a weekend or a legal holiday, the return and payment are due on the following business day.)

Affected taxpayers that apply for an extension of time to file have 6 months from the original due date to file their tax returns. If you are filing form CBT-100, CBT-100U, or BFC-1 (BFC-1-F) and your year ended on July 31, 2020, you must file your tax return on or before June 15, 2021, which is 6 months after the original due date of December 15, 2020. If you are filing Form CBT-100S and your year ended on July 31, 2020, you must file your tax return on or before May 15, 2021, which is 6 months after the original due date of November 15, 2020.

PaperlessPLUS 20.0 Download

 

Customers who downloaded PaperlessPLUS 20.0 for use in a network environment may experience issues accessing the product (standalone users are working as expected). Our team is actively working to resolve this issue and we will provide a product update later this week.

 

We have temporarily removed the PaperlessPLUS download from the Refunds Today support site and will replace it with an updated release as soon as it is available.

 

We apologize for any inconvenience. We will keep you updated on our progress resolving this issue.