The IRS officially opened tax season weeks ago—on January 29, 2024—and the tax filing season, while still sluggish, appears to be warming up.
Early filing data still shows a dip in tax returns received compared to the prior year. The IRS received 34,743,000 tax returns as of February 16, 2024, a 5.7% decline from the previous year.
The IRS notes that the current tax season began about a week later than it did in 2023. The 2023 filing season began on January 23, 2023, which means the IRS had been receiving returns for 26 days by February 17, 2023. That compares to only 19 days for the 2024 filing season, which opened on January 29, 2024. The IRS suggests, for the third week in a row that the filing season statistics “show a strong start to Filing Season 2024, with all systems running well.”
I’ve noted for weeks that many taxpayers might be waiting to file until the Senate votes on The Tax Relief for American Families and Workers Act. The legislation, which would, among other things, expand the child tax credit retroactively to the 2023 tax year, was announced in mid-January and passed the House at the end of the month. The bill has not yet been slated for a vote in the Senate. IRS Commissioner Danny Werner has encouraged taxpayers to file anyway, saying that the IRS will make any necessary changes.
Many taxpayers and tax professionals have indicated they believe it makes more sense to wait and see what Congress does, and file a little later, rather than file now and amend, or file and hope that IRS will timely and accurately update returns. My sense is that the longer the Senate drags out the vote, the more likely it will be that taxpayers will decide the wait isn’t worth it—that’s especially true for taxpayers who might be expecting a tax refund.
The data shows that the IRS has processed 34,546,000 individual income tax returns as of February 16, 2024, as compared to 36,769,000 by February 17, 2023. That’s a decrease of just 6%.
Most—just under 60%—of e-filed returns were self-prepared. That number is dropping as the season progresses, which isn’t unusual. Professionally prepared returns tend to pick up as the season rolls on.
A significant majority of the returns received to date—a whopping 98%—were e-filed. The IRS encourages taxpayers to file electronically, noting that taxpayers who e-file and use direct deposit typically see a refund within 21 days.
Web visits to IRS.gov have edged up for the second week in a row, increasing by 8.7% compared to last year. There have been 231,436,000 visits to the website as of February 16, 2024, compared to 212,815,000 visits as of February 17, 2023.
Taxpayers may be using the website more often to check the status of their tax refunds. The IRS recently reminded taxpayers that Where’s My Refund? remains the best way to check the status of a refund. Notably, it provides taxpayers with three key pieces of information: receipt of your federal tax return, approval of your tax refund, and issuing date of your approved tax refund. Information for returns from tax years 2023, 2022 and 2021 is available.
Refund status information is typically available within 24 hours after the IRS receives your e-filed tax return for the current tax year, three to four days after receipt of your e-filed tax return for the tax years 2022 or 2021, or four weeks after mailing your paper return.
The IRS only updates the tool once a day, usually overnight.
Taxpayers who are checking their refund status are probably glad to see one number moving up this week: the average tax refund.
The number of refunds issued has remained relatively low. The IRS has issued 20,883,000 tax refunds so far in 2024 compared to 27,781,000 as of February 17, 2023, a decrease of 25%. The average tax refund, however, is up: $3,207 per taxpayer as of February 16, 2024, compared to $3,140 as of February 17, 2023, an increase of 2%. That’s not a huge bump, but taxpayers are likely hoping it’s a trend.
Total refund dollars issued in 2024 work out to $66.980 billion, compared to $87.245 billion in 2023.
I would expect to see those numbers increase within the next couple of weeks. The law requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the ACTC until mid-February. The rule applies to the entire refund—even the portion not associated with the EITC and ACTC. That means if you qualify for the refundable credit, you’ll have to wait until the IRS can release it. With Presidents Day in the rearview mirror, early EITC/ACTC filers should begin to see tax refunds landing in their bank accounts if they opted for direct deposit and there are no issues with their tax return.
It continues to be an unpredictable season. Check back as the season progresses for updated numbers.