For the first time, anyone e-filing Form 1040-X can select direct deposit and enter their banking information for a faster refund.
The IRS announced on February 9 that anyone who electronically files an amended individual income tax return can now decide to have any resulting refund deposited into their bank account.
Taxpayers who filed Form 1040-X, Amended U.S. Individual Income Tax Return, with the IRS in the past had to wait for a paper refund check to be mailed to them, which added an extra step to the amended return procedure. For a quicker refund, those who want to file Form 1040-X electronically can now choose direct deposit and enter their banking or financial institution information.
According to the IRS, taxpayers submit a total of 3 million amended returns annually.
The IRS Acting Commissioner Doug O’Donnell said in a statement that this is a significant victory for taxpayers and another accomplishment as we transform the IRS to enhance taxpayer experiences. With the help of this crucial update, people who file amended returns will experience less inconvenience and faster refunds. Direct deposit is always encouraged by the IRS. It only makes sense to quickly deliver tax refunds to taxpayers without having to worry about a misplaced or stolen paper check.
Following upgrades to IRS technology systems, the IRS started accepting Form 1040-X electronically in 2020 but did not yet provide a direct deposit as a refund option. If the software developer provides that service, taxpayers who use tax preparation software to file an original tax return may also file an electronic Form 1040-X.
Using the online “Where’s My Amended Return?” tool, taxpayers can determine the status of their amended return.
The option to submit a paper Form 1040-X and obtain a paper check is still available to taxpayers. They should adhere to the guidelines for filling out and submitting the paper form, but direct deposit is not available for amended returns sent in via paper.
According to the IRS, processing an amended return is still done manually even if it is filed electronically, so the current processing time for both paper and e-filed amended returns is more than 20 weeks. However, filing electronically and choosing direct deposit eliminates the time it would take for a paper refund check to travel through the U.S. Postal Service.
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IRS - Direct deposit of refunds is now an optio...
[…] For the first time, anyone e-filing Form 1040-X can select direct deposit and enter their banking information for a faster refund. The IRS announced on February 9 that anyone who electronically files an amended individual income tax return ca […]