IRS to Taxpayers: Direct Deposit is the Fastest Way to Receive a Refund

Tax season is upon us, and if you want your refund quickly, choose Direct Deposit.

Nacha recently had the opportunity to sit down with Ken Corbin, the Wage and Investment Commissioner and Chief Taxpayer Experience Officer at the IRS, to discuss this year’s tax season. His message was clear: use Direct Deposit if you’re due a refund and want it fast.

“The pandemic continues to create challenges, but we’re reminding people there are important steps they can take to help ensure that their tax return and refund don’t face processing delays,” said Corbin. “As always, we are encouraging taxpayers, tax professionals and [others] to file electronically and to use Direct Deposit if you’re getting a refund. Avoiding a paper [check] refund is more important than ever this year.”

According to Corbin, the IRS issues 9 out of 10 refunds in less than 21 days for taxpayers who use Direct Deposit for their tax returns. However, it will take significantly more time for taxpayers who choose a paper check for their refunds to receive their money. The IRS must first finish processing the tax return, then print and mail the check, and finally, the Postal Service needs to deliver it.

To encourage savings, taxpayers can use Direct Deposit to split their refund into as many as three different accounts – including checking, savings and an Individual Retirement Account (IRA).

Some other important information: taxpayers who file their taxes both electronically and  using a paper return can also choose to receive their tax refund via Direct Deposit, and taxpayers who end up owing the IRS can file their taxes immediately but wait to schedule their electronic payment through the ACH Network until April 18.

The IRS has long espoused the value of Direct Deposit. From IRS refunds and COVID-19 relief payments to Social Security and Veterans’ benefits, the federal government has long relied on Direct Deposit to pay Americans because it is fast, safe and secure.

“Direct Deposit is fast and dependable,” said Michael Herd, Nacha Senior Vice President, ACH Network Administration. “Your money goes directly to your account, and you don’t have to wait for a check to clear to access it.”

To hear more from the IRS, check out our podcast episode with Commissioner Corbin.