The IRS has announced that the 2021 tax filing start date (to file your 2020 income tax return) has been delayed until the end of the second week of February, 2021. This is a notable 2+ week delay for a number of reasons that I will highlight later in this article.
What is the 2021 Tax Season Start Date?
The tax season start date for 2021 will be Friday, Feb. 12, 2021. By definition, the tax season start date is the first day in a given tax season when the IRS begins to accept and process tax returns for the prior year. No returns will be processed sooner, and the IRS says to allow 3+ weeks for refunds to be processed.
February 12 is 2+ weeks later than the standard tax start date, which is typically the 4th Monday in January. For example, last year’s tax filing start date was January 27.
Has the 2021 Tax Deadline Changed?
Even with this delay, as of right now, the tax deadline for 2021 has not been delayed. The deadline remains Thursday, April 15, 2021. You might remember that there was an extended tax filing deadline last year, due to COVID-19, that allowed taxpayers to file their tax return by July 15, without needing to file an extension with the IRS. I do not anticipate that we’ll see a similar tax filing extension deadline in 2021, but it’s certainly possible, particularly as COVID continues to rapidly spread.
Submitting a Tax Return Prior to the Start Date
You can technically complete your tax return prior to the tax filing start date, however, your return will be held for processing (either by the IRS if you file directly or for e-file submission by tax software companies) until the tax start date. In other words, your return cannot be processed prior to the official start date of tax season.
I would not recommend filing your return prior to the tax start date, as there could be a number of late changes to tax forms and software that could impact your return, and there is no benefit to filing sooner.
The Significance of a Delayed Tax Season Start Date
With the COVID-19 pandemic and its economic impact, any delay to the start of tax season has consequences, so it’s a particularly bad year to have a delay. For starters, this pushes back the processing of much needed refund checks by over 2 weeks. Why the delay? According to the IRS,
The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.
This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.
In all fairness to the IRS, they have had the dual responsibility of managing the COVID relief checks (aka the “Recovery Rebate Credit“) that weren’t passed by Congress until the end of December and preparing for the 2021 tax season at the same time, while being significantly understaffed.
So not only will normal refunds be delayed by 2+ weeks, but so will Recovery Rebate Credits to those who did not automatically receive them. This could include:
- Those who had a child in 2020.
- High wage earners who weren’t eligible based on prior income level, but lost their job in 2020.
- Those who were a dependent in 2019, but filing their own taxes in 2020.
- Those who live with someone who doesn’t have a Social Security number.
- Those who are still owed a check, but the IRS has not sent it as of Friday, January 15. Note: you can check on the status by using the Get My Payment tool.
Those who claim either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) should not be effected. Under the PATH Act, the IRS is not able to issue a refund involving the EITC or ACTC before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves. The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns.
Where to Start Filing Taxes
You can start filing your return with tax software companies or directly with the IRS at any time. I will soon be revising my lists of the best tax prep software and best & cheapest ways to e-file. A few of my favorites over the years (with notable discounts from affiliate partnerships) include: