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 average refund issued so far this year is $2,880 — down from $3,125. That's down 7.8%.
Some of the pace could indeed pick up. But many remain concerned that the IRS is going into an extremely challenging year, considering that the IRS 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.
The IRS started processing tax returns at a much later date than usual, noting that it needed the extra time to program its systems to reflect new tax rules that were signed into law Dec. 27, plus the IRS has been busy sending out the second round of Economic Impact Payments in January.
A year ago, the IRS began processing 2019 tax returns on Jan. 27.
Nearly 38% fewer federal income tax returns were processed through Feb. 19, what the IRS called Day 8 of the 2021 filing season, when compared with the same time frame last year.