The IRS pays 9 out of 10 tax refunds within 21 days. Still, when you need your refund payment to cover important expenses or debt the money can’t come soon enough.
Taxpayers who need their refunds right away usually file right away hoping the IRS is on standby to issue out refund checks. But when does IRS update refund status and how will it affect how soon you get your funds?
As with anything done by the IRS, the answer is subject to change based on the tax laws that year. Different tax returns mean different rules that affect how quickly they can offer you an update. Here’s a general guide to understanding how your tax refund status gets updated.
Filing an Early Return
Filing a tax return early is a good start to getting on track to receive your refund. The only problem is that there’s no way to know how many other returns are filed in the same time period as yours.
During an unlucky year, you might be filing during an unusually busy week where everyone else seems to have similar refund goals. The IRS always needs ample time to accurately process your return.
No matter when you file, the IRS offers a variety of web-based tools to help keep you updated on exactly when to expect your money. Make sure your accountant or tax preparation software gives you a full copy of your return. It will be needed ongoing to check refund updates.
There are a few methods of filing that can impact how quickly your refund is issued. Your refund status will get updated based on this number. Electronic filings, for example, have a faster turnaround time than snail mail for obvious reasons.
Earned Income Tax Credit and Additional Child Tax Credit
Not all tax refund payments are created equal. If you file an Earned Income Tax Credit or the Additional Child Tax Credit it’s possible your refund might be on hold.
The Protecting Americans from Tax Hikes Act (PATH) prevents the IRS from issuing refunds before mid-to-late February. This means that even if you file in late January you could wait more than a month for your refund payment.
Refund updates won’t be available for these filers until their processing time begins in late February. Unfortunately, the entire refund is held even if only part of it is allocated to the earned income tax credit or additional child tax credit.
Method of Payment
There are three primary ways the IRS issues tax refund payments. You can have a paper check mailed to your home, get a direct deposit or use your return to purchase U.S. government savings bonds.
Use IRS Form 8888 to set up your direct deposit using a bank account and routing number. If you don’t choose another payment option, expect your refund to come as a check in the mail.
Amendments to tax returns are possible, but not to your direct deposit form. Unfortunately, if you enter your bank account information incorrectly, the payment method defaults to a check.
If you’re expecting more than three refund payments, don’t give the IRS the same bank account information for direct deposit. The IRS allows up to 3 deposits into the same account before cutting you off.
More than three refund payments require a check to be cut. Some online tax services add third-party refund payment options like advances or reloadable prepaid VISA gift cards.
When Does IRS Update Refund Status?
The IRS processes tax refunds twice each week. The first day of refunds gets devoted to direct deposit processing. During the second round of processing, the IRS sends out paper checks to anyone who didn’t request a direct deposit or government savings bonds as an option.
Twice per week doesn’t mean the week after you file your tax return. With the standard tax season lasting almost four months, there are many options for when your tax refund payment gets processed.
Taxpayers who mail in a return should allow 6 weeks for processing after the return is received. This processing time applies whether you select direct deposit or check refund payments.
And if you e-file your return, the processing time is cut in half. Approximately three weeks from the date the IRS confirms receipt of your return you should see a deposit in your account or receive a check in the mail. Calling the IRS is the fastest way to confirm receipt of a mailed tax return.
Where’s My Refund?
Once your return is received, you can monitor refund payment updates using an IRS web-based tool called “Where’s My Refund?” This tool is available in three primary ways: online via the IRS website, by phone, and as a mobile phone app.
The mobile app for “Where’s My Refund?” is available through the IRS2Go app. The app is available in the Google Play, Apple and Amazon app stores.
In order to use the service, you need to know your social security number or ITIN, your current filing status, and the exact amount of your expected refund. If you are missing any of this information, calling the IRS for an update is possible but expect long delays the closer you get to the filing deadline.
When you e-file, information on your refund is available as soon as 24 hours. The Where’s My Refund tool updates daily starting from the date your return is received. Keep in mind that refund information using this tool is only for the most current tax year.
The refund status tracker has three standard phases: Return Received, Refund Approved and Refund Sent. The tool provides an exact refund date as soon as the IRS processes your tax return and approves your refund. Here’s a quick overview of each phase:
This is basically a postmark date for when the IRS receives your tax return. The processing time from this date varies based on the type of tax return submitted. The fastest turnaround times are for e-filed individual 1040 tax returns for the current year.
If your return doesn’t show ‘received’ after 72 hours of e-filing, contact the IRS right away. A mistyped social security number or typo in the spelling of your name could flag a fraud alert or attribute your return to the wrong tax account.
The IRS reviewed your information and agrees with the refund amount. The approved amount is now in the queue to get processed for payment. The preparation begins to send your refund through direct deposit or in the mail depending on the choice you select.
The status updater lists which option you selected. Expect to receive an estimated date of deposit or mailing during this phase. Use this date to track whether a refund is lost or stolen.
If it’s been longer than 21 days, and you still haven’t received your refund payment there may be issues. If your return has errors, is incomplete, or you’re the victim of identity theft you should expect delays.
Direct deposits aren’t instant. Your deposit might not appear for up to five days after the date provided by the IRS for deposit since banks have varying credit dates for direct deposits. Checks can take several weeks as the IRS sends them standard mail.
There are some refund updates that won’t appear on the IRS hotline or Where’s My Refund tool during the standard timeline. Here are tax return exceptions to the refund updates rules:
- Amended Tax Return (Form 1040X) Information
Refund payments associated with Form 1040X won’t be updated on Where’s My Refund. An amended tax return is one that has been corrected to reflect changes in status or fix mistakes. Amended returns can take around 3 months to process. Don’t expect any updates on your refund until this time period passes.
- Business Tax Return Information
No business tax return information is available online or via mobile app. To get an update on your status, call the IRS at 800-829-4933.
- Prior Year Refund Information
If you are filing a return from a previous year and are owed a refund, this info won’t be included in Where’s My Refund. Even if you file the current year and previous year together you’ll still need to call the IRS for updates on your refund status.
- Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding Taxpayers who request a refund of tax withheld on a Form 1042-S by filing a Form 1040NR, won’t see refund updates for up to 6 months from the due date of your 1040NR.
There are a few situations where your refund processing and amount changes from what you originally expected. These situations usually involve large debts owed to a government agency, but can sometimes involve private organizations.
According to the IRS, The Department of Treasury’s Bureau of the Fiscal Service (BFS) issues IRS tax refunds and Congress authorizes BFS to conduct the Treasury Offset Program (TOP).
In other words, your tax refund can be garnished to repay legally mandated debts like:
- Past-due child support
- Debts payable to a federal agency
- State income taxes
- Unemployment debts payable to the state due to fraud or negligence
Expect delays on your refund when a TOP investigation begins. This information won’t be available with your Where’s My Refund status updates.
BFS will contact you directly with the amount of the offset, who is receiving the offset payment and the original amount of your refund. The IRS receives notice of the amount taken from your refund once the refund date passes.
Disputes must be taken up directly with the agency receiving the offset payment, not the IRS.
The Where’s My Refund tool is helpful because it logs any mishaps that come up during the refund process. For example, check payments returned to the IRS as undeliverable by the U.S. Post Office will be noted in your account.
Refund information for tax returns filed before July 1st remains in the Where’s My Refund tool until mid-December. The exact varies by year so be sure to capture all needed refund information well before the holiday season begins.
If you file after July 1st, the refund information remains in the Where’s My Refund tool throughout the following year. Once your new return is filed, the old data gets erased.
Lost or Stolen Refund Payments
If for some reason your tax refund payment is lost or stolen, a claim can be filed online. The IRS asks that you wait a minimum of 28 days from the date your refund was mailed to be sure the issue isn’t due to a postal delay.
The Where’s My Refund tool can provide details on how to file a claim and what information is needed. Once you’ve filed, follow up by phone if you don’t receive an update within 21 days.
If you accidentally receive a check in someone else’s name, don’t deposit it. Even if you are expecting a similar amount as a refund you need to return the payment to the IRS to get a new check or direct deposit mailed to you.
Fast Refund Payments
The fastest way, hands down, to get your refund payment is through direct deposit. The IRS boasts 8 out of 10 refunds are sent using direct deposit.
When does IRS update refund status when your direct deposit payment is changed to a paper check? Usually when the direct deposit transaction fails. If your name isn’t on the checking account provided, the funds won’t be transferred.
Check your refund status daily to ensure there are no mishaps that create a longer delay in receiving your payment. For more tax help, please check out our resources.