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Thursday, March 23, 2023

How long does it take to get a tax refund?

How long does it take to get a tax refund?

calendar for refund

Key takeaways

If you're expecting a tax refund, then you may be wondering how long it takes to get your money. Find out what this timeline may look like for you.

By
Nathan Bengali

11.18.2022

In 2021, Tax Day — or the due date for filing federal and state income tax returns for most people — was delayed by about a month due to the COVID-19 pandemic. In 2022, Tax Day was April 18. And this year, in 2023, the tax deadline is also April 18.

One of the biggest questions many people have about their taxes is how long it takes to receive a tax refund. In general, you should receive your refund anywhere between eight days and two months from when the IRS accepts your return, depending on how you file and choose to receive your refund.

Tax refund process

The IRS follows a very detailed process when handling tax returns and issuing tax refunds. The first step is for them to accept your return, which usually happens within 24-48 hours.

During this time, they are making sure that the personal information included on your return matches the information in their records. If everything checks out, you’ll receive a notice that the IRS has accepted your return. This is when the clock starts ticking on your refund schedule.

Federal tax refund delivery time

Following is a breakdown of how much time it generally takes to receive a tax refund depending on how the return is filed and which method is chosen to receive the refund.

Filing method

E-file/
Direct deposit

Paper file/
Direct deposit

E-file/
Check

Paper file/
Check

Refund time

1-3 weeks

3 weeks

1 month

2 months

This chart can be used as a guideline to estimate when you might receive your tax refund.

Date return accepted

Direct deposit sent

Paper check mailed

March 15 – March 21

March 28

April 4

March 22 – March 28

April 4

April 11

March 29 – April 4

April 11

April 18

April 5 – April 11

April 18

April 25

April 12 – April 18

April 25

May 2

April 19 – April 25

May 2

May 9

April 26 – May 2

May 9

May 15

May 3 – May 9

May 15

May 23

May 10 – May 16

May 23

May 30

May 17 – May 23

May 30

June 6

May 24 – May 30

June 6

June 13

May 31 – June 6

June 13

June 20

June 7 – June 13

June 20

June 27

June 14 – June 20

June 27

July 4

June 21 – June 27

July 4

July 11

June 28 – July 4

July 11

July 18

July 5 – July 11

July 18

July 25

July 12 – July 18

July 25

August 1

July 19 – July 25

August 1

August 8

July 26 – August 1

August 8

August 15

Factors that affect timing

Choosing electronic or paper filing of your tax return. This is one of the main factors affecting the timing of your refund. The other main factor is choosing direct deposit of your refund or receiving your refund via a paper check.
E-filing can speed up the refund process. Before e-filing was available, tax returns had to be mailed to the IRS, where the information was scanned or manually entered into the system. Then the IRS issued paper checks that had to be mailed to taxpayers. This manual process could take up to two months, keeping many people anxiously waiting by their mailboxes for weeks.

According to the IRS, refunds can be issued to taxpayers by direct deposit as soon as eight days after tax returns are filed. Meanwhile, nine out of 10 taxpayers choosing direct deposit receive their refunds within 21 days of the date they file electronically. Keep in mind that it may take an extra few days for your bank to make funds available to you after a refund is issued electronically.

Claiming certain tax credits. Claiming the earned income tax credit (EITC) and the additional child tax credit (ACTC) is another factor affecting timing of your tax refund. Special rules require the IRS to hold these refunds until February 27, so you might experience a delay if you claim one or both of these tax credits.

Errors in your tax return. Errors could also result in tax refund delays, as could suspicion of identity theft or fraud related to your return.

How to track your tax refund

You can track the status of your tax refund by using the IRS Where’s My Refund? tool. Or, if you prefer, you can call 800-829-1954 to check on the status of your refund. The tool will tell you the dates your tax return was received and approved and the date your refund was sent.

The IRS has also created an app called IRS2GO that allows you to track your tax refund. It can be downloaded from the Amazon App store or the App Store® from Apple® or on Google PlayTM.

To use these tools, you’ll need to know your Social Security number, your filing status and the dollar amount of your refund. Refund information is available about 24 hours after you file your tax return electronically or a month after you mail in a paper tax return.

How can I speed up my refund?

Here are three tips to help speed up receipt of your income tax refund:

1. Keep your tax records organized. 

Being organized will help you file your tax return sooner while also avoiding mistakes that could delay the processing of your return. For example, store all your tax documents — such as W-2 and 1099 forms and documentation supporting itemized deductions — in one central location so they’re easy to locate when you need them.

2. Use tax preparation software.

Tax prep software can greatly simplify and streamline the tax-filing process. These programs include all the IRS forms and schedules you’ll need, and they also help ensure that you follow all the current tax laws and take advantage of every potential deduction, which could boost your tax refund.

3. File your return electronically and choose direct deposit of your refund.

As detailed above, filing your return electronically and choosing to receive your refund via direct deposit instead of a check in the mail will accelerate your refund considerably. With e-filing and direct deposit, your refund could be in your bank account less than two weeks after the IRS accepts your return.

What to do once you receive your refund

A tax refund can seem like a financial windfall, so it’s smart to give some thought to what you’re going to do with the money once you receive it.

Here are five ideas.

1. Pay down debt.

High consumer debt levels, especially credit card debt, are one of the biggest obstacles to building wealth, which makes paying off debt one of the smartest uses of a tax refund.

2. Start or add to an emergency fund.

This is a stash of money kept in a liquid savings account that you can tap for a “rainy day,” such as an unexpected car or home repair or high out-of-pocket medical expenses. One benchmark is to save between three and six months’ worth of living expenses in an emergency fund.

3. Save it for retirement.

If you have an IRA, consider contributing some or all of your tax refund to your IRA. Doing so could help improve your retirement financial situation down the road.

4. Save it for a home down payment.

It’s a good idea to make at least a 20% down payment when buying a home if you can. This will help lower your monthly mortgage payment and might save you from having to purchase private mortgage insurance. Setting your tax refund aside in a down payment savings fund could help you accomplish this goal.

5. Have some fun!

These are all financially responsible strategies, but it doesn’t necessarily hurt to have a little bit of fun with your tax refund. For example, maybe you could devote half of the refund to one of these ideas and the other half to something fun like a long weekend at the beach or in the mountains, or even just a nice dinner at a fancy restaurant you wouldn’t normally go to.

The bottom line

Empower offers free financial tools that can help you improve your personal financial management, including options to consider when thinking about what to do with your tax refund.

You can do a few things now to get yourself on track.

  1. Sign up for the Empower Financial Dashboard. Millions of people use these free and secure online financial tools to see all their accounts in one place and plan for long-term financial goals.
  2. Consider talking to a financial professional for more detailed guidance on your tax-optimization strategies.

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Nathan Bengali

Nathan Bengali

Contributor

Nathan Bengali is a Senior Financial Advisor at Empower. Based in Denver, he has been with the company since 2014.

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“EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. ©2023 Empower Annuity Insurance Company of America. All rights reserved.