It's the first day of the 2017 tax season. The Internal Revenue Service (IRS) is now accepting and processing 2016 federal individual income tax returns - and so far, according to IRS, they're on schedule.
It's the first day of the 2017 tax season. so far, according to IRS, they're on schedule.
"Following months of hard work, we successfully opened our processing systems today to start this year’s tax season," said IRS Commissioner John Koskinen. "Getting to this point is a year-round effort for the IRS and the nation’s tax community. The dedicated employees of the IRS look forward to serving taxpayers this filing season, and I want to thank all of the tax and payroll community for their hard work that makes tax time smoother for the nation."
That doesn't mean that refunds are necessarily in the mail. Congress passed a law which requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. The hold allows IRS to match information from forms W-2 and 1099 with information reported on tax returns; in prior years, refunds could be issued before forms were matched which increased the likelihood of fraud. The hold, together with bank processing times and bank holidays, means that taxpayers should not count on seeing those tax refunds until the week of February 27.
The IRS expects more than 70% of taxpayers to receive tax refunds this year. Last year, 111 million refunds were issued, with an average refund of $2,860. The IRS believes the numbers for 2017 will be similar.
Like last year, the IRS anticipates issuing more than nine out of 10 refunds in less than 21 days. However, with additional levels of review aimed at reducing tax-related identity theft and refund fraud, there could be individual delays.
What about state income tax returns? Remember that those timelines may differ from the IRS timeline and there may be additional requirements or reviews this year to try and reduce instances of fraud.
Some of these changes will be invisible (or nearly invisible) to taxpayers but will help the IRS, states and the tax industry provide new protections for taxpayers.