skip to main content
X

IRS Introduces Direct Deposit for E-Filed Amended Returns

IRS Introduces Direct Deposit for E-Filed Amended Returns

Processing an amended return is still a manual process estimated at about 20 weeks for paper and e-filed amended returns, but taxpayers can now opt for direct deposit on any refunds, potentially cutting their refund wait time.

‘Big win for taxpayers’

The announcement was made earlier this week and was touted as a “big win for taxpayers, and a great achievement as the IRS begins to transform the taxpayer experience”. Until this point, filers of a 1040-X amended return had to wait for a paper check for any refund, adding extra time to the process and subjecting themselves to potential delays due to mail backlogs and other hurdles.

According to the IRS, there are about 3 million amended returns each year, and this important update will reduce refund wait time and inconvenience for those filing amended returns. Direct deposit is always encouraged so that taxpayers can receive their refund as quickly as possible without the potential for a paper check to be lost or stolen.

The IRS adapts to the times

The IRS initially began accepting 1040-X forms electronically in 2020, but taxpayers were not allowed to select direct deposit for their refund. Technology updates at the Service will allow those who filed amended returns electronically to receive their refunds faster and more securely through direct deposit in their bank accounts. Filers will simply enter their banking or financial institution information, similar to the process for receiving other refunds.

Taxpayers who file an original tax return using tax prep software can also file an electronic Form 1040-X if the software allows for it.

Paper is still an option

Taxpayers will still be able to submit a paper version of Form 1040-X and receive a paper check if they desire. They can follow the instructions for preparing and submitting the paper form. Direct deposit isn't available on amended returns submitted on paper.

 

02/13/2022

Have a question?

Fill out the form to speak with one of our tax professionals

Hide Firm Disclaimer

©2024 UHY LLP. ALL RIGHTS RESERVED.

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc., and its subsidiary entities. UHY Advisors, Inc.’s subsidiaries, including UHY Consulting, Inc., provide tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors” and “UHY Consulting”. UHY Advisors, Inc., and its subsidiary entities are not licensed CPA firms. UHY LLP, UHY Advisors, Inc. and UHY Consulting are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP, UHY Advisors and/or UHY Consulting (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

On this website, (i) the term "our firm", "we" and terms of similar import, denote the alternative practice structure conducted by UHY LLP and UHY Advisors, Inc. and its subsidiary entities, and (ii) the term "UHYI" denotes the UHY international network, in each case as more fully described in the preceding paragraph.