Yahoo Finance Tax-filing season begins Jan. 24, IRS says
This year's tax-filing season officially begins on Monday, Jan. 24, the Internal Revenue Service announced Monday. That's the first day the agency will start accepting and processing 2021 federal tax returns.
"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare," said IRS Commissioner Chuck Rettig in a statement. "The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays."
The agency said the Jan. 24 start date will ensure its systems run smoothly. This year, the IRS must make sure that eligible taxpayers receive the correct amount of the Child Tax Credit.
The American Rescue Plan not only increased the amount qualified taxpayers can receive, but it also made the credit fully refundable, meaning taxpayers get the full credit amount even if that exceeds how much they owe in taxes.
Additionally, the legislation allowed half of the Child Tax Credit to be distributed in advance monthly payments that started in July of last year and concluded in December. Taxpayers will receive the remaining half after filing their 2021 tax return.
The IRS also must calculate if any taxpayers should receive the $1,400-per-person stimulus payment distributed in March and April as part of the American Rescue Plan. Eligible taxpayers who didn't receive the payment can claim it on their 2021 federal tax return.
The agency encouraged taxpayers to file electronically with direct deposit to receive their tax refunds as soon as possible. Taxpayers should receive their refunds within 21 days of filing their return electronically if they use direct deposit and as long as there are no issues with the return.
By law, the IRS cannot issue tax refunds to taxpayers claiming the Earned Income Tax Credit or Additional Child Tax Credit before Feb. 15.
The agency's Free File program will open Jan. 14 for taxpayers who made $73,000 or less in 2021. The program is offered through commercial tax filing companies, and the IRS will release more information this week on where to find Free File providers.
The deadline for filing your 2021 tax return is Monday, April 18, for most taxpayers. Because of the Patriots' Day holiday in Maine or Massachusetts, those residents have until April 19 to file their returns.
Janna is the personal finance editor for Yahoo Finance. Follow her on Twitter @JannaHerron.
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