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yesterday

IRS Pushes Direct Deposit as Bigger Refunds Begin, With Shutdown Threat Raising Delay Risks

The national taxpayer advocate warns of processing strain from a 27% workforce drop.

File Image: One dollar and five dollar bills in a tip box at a car wash in Brooklyn, N.Y., Wednesday, December 17, 2025.
Image
1040 income tax form and w-2 wage statement with a federal Treasury refund check. Closeup with selective focusing.
FILE - A 1040 tax form printed from the Internal Revenue Service web page is seen, Feb. 13, 2019, in Zelienople, Pa. (AP Photo/Keith Srakocic, File)

Overview

  • Filing opened Jan. 26 with the IRS expecting about 164 million returns by April 15, and the agency is steering filers to e‑file with direct deposit as paper refund checks are phased out under a 2025 executive order.
  • Analysts project larger refunds this season, with the Tax Foundation estimating an average around $3,800, helped by OBBBA provisions such as higher child credit and new deductions for tips, overtime, and interest on qualifying U.S.-made vehicle loans, claimed via Schedule 1‑A.
  • Electronically filed returns with direct deposit are generally processed within about 21 days, while paper returns or filings needing corrections can take weeks longer.
  • Most Earned Income Tax Credit and Additional Child Tax Credit refunds for direct‑deposit filers are expected to be available by March 2, with projected dates appearing in Where’s My Refund? by Feb. 21.
  • A potential government shutdown as soon as Jan. 30 could curtail IRS operations and delay many refunds, and prior contingency plans only allowed payments on error‑free e‑filed returns eligible for automatic direct deposit.