The IRS has provided the latest statistics on tax return filings and refunds, summarized in the table below, which not surprisingly shows that the number of filings and refunds paid are currently lower than last year with only a few weeks left in the extended 2020 tax season. The lag in tax return filings, which have generally been increasing year over year, and higher average refunds are likely due to the delayed tax deadline following the Coronavirus induced government and IRS slowdowns.
The higher average refund amount in 2020 essentially confirms that those expecting a refund filed as soon as they could. While those who owed taxes or were not expecting a refund will wait right up to the July 15 tax deadline to file their return and pay any taxes owed.
|Tax Return Data||2019||2020||Change|
|Total Returns Received||144,125,000||136,509,000||-5.3%|
|Total Returns Processed||141,870,000||124,631,000||-12.2%|
|Amount||$286 Billion||$254 Billion||-10.7%|
Another interesting data point is that the number of tax returns filed numbers now includes returns filed to obtain Economic Impact Payments (a.k.a stimulus checks) by those who would not usually file income tax returns. By the time the extended 2020 tax season is done I expect the total number of returns filed to be significantly higher than 2019, largely because of the rush to qualify for the stimulus check payments which were based on the latest 2018 or 2019 tax return information.
Unfortunately this has not helped SSI recipients or those not required to file a return get their full stimulus payment. Further many Americans are reporting that tax refund payments have been delayed and it has been very hard to get hold of a live IRS agent due to COVID related staffing constraints and the IRS focus on processing millions of stimulus checks.
Also given the issues of paying out supplementary stimulus amounts like the $500 child stimulus and IRS guidance to claim missing stimulus payments in 2020 tax returns (filed in 2021), I expect the filing numbers to be even higher again next year when hopefully things are back to normal. The average refund amounts will also be higher given the rise in unemployment levels and lower taxable incomes, despite the extra $600 weekly unemployment checks.
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