IRS Updates Tax Refund Information for 2023
The Internal Revenue Service (IRS) updated its tax refund guidelines in 2023. Taxpayers who file electronically and use direct deposit can expect to receive their refunds within 21 days, provided that no errors or extra reviews are required.
However, certain returns may take longer to process, resulting in more extended refund wait times. For example, suppose you have claimed the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). In that case, your refund will be issued on February 27, even if you have opted for direct deposit and there are no issues with your tax return. This is due to federal law mandating extra identity checks for EITC or ACTC filers.
The IRS can only issue part of your refund related to the credit after mid-February, including your entire refund. If you have claimed EITC or ACTC, the IRS may require more information about your return. If that happens, you will receive a letter from them. The IRS has updated the information for EITC or ACTC filers with projected deposit dates now available on Where’s My Refund?
The EITC is a tax break for low to moderate earners, providing higher amounts to those with children. According to the most recent IRS figures, about 23 million workers and families received about $57 billion in EITC for tax year 2022. The average amount of the credit was $2,541, but depending on the number of children and income, it can be worth up to $7,430.
The IRS estimates that approximately 20% of eligible taxpayers still need to claim the credit despite the eligibility. The ACTC is the refundable portion of the Child Tax Credit and is declared by families who owe less than their Child Tax Credit Amount. For the 2023 filing year, ACTC is $1,600.
Overall, taxpayers are advised not to rely on receiving a refund by a specific date. The IRS cautions that certain returns will take longer to process than others, resulting in more excellent refund wait times.
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