Home Life Tax refunds flow into economy far behind last year's pace

Tax refunds flow into economy far behind last year's pace

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Tax refund checks are flowing into pocketbooks — and the overall economy — at a much slower pace so far in February.

The Internal Revenue Service reported Thursday that the total dollar amount of tax refunds was down 59.2% through Feb. 19 — just one week after the IRS began processing tax returns on Feb. 12. That’s the latest data available. 

Nearly $47.4 billion in tax refunds have been issued so far this year, but that’s a far cry from more than $117 billion in federal income tax refunds issued through Feb. 21, 2020.

The slowdown reflects the fact that the IRS was not dealing with coronavirus-related shutdowns in January and February last year, which continue to slow down operations this year. And the IRS also kicked off its tax season later than usual this year. 

The Internal Revenue Service -- along with its Security Summit partners in the tax industry -- reports progress in December 2018 on efforts to crackdown on the filing of fraudulent tax returns to steal refund cash. File photo.

The average refund issued so far this year is $2,880 — down 7.8% from $3,125.

Some of the pace could indeed pick up. But many remain concerned that the IRS is going into an extremely challenging year, considering it was still dealing with 6.7 million 2019 returns that had not yet been processed as of Jan. 30. 

Some of this falloff in pace is to be expected after essentially a two-week delay to the season kickoff. 



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