The Internal Revenue Service added a new option Thursday for taxpayers who electronically file an amended tax return, giving them the ability to select direct deposit to speed up their refund.
Until this week, taxpayers who filed a Form 1040-X amended return needed to wait for a paper check for any refund, adding extra time to the process. Now, any taxpayer who e-files a Form 1040-X can select direct deposit and enter their banking or financial institution information for faster delivery of refunds. According to IRS statistics, taxpayers file about 3 million amended returns each year in total.
“This is a big win for taxpayers and another achievement as we transform the IRS to improve taxpayer experiences,” said IRS acting commissioner Doug O’Donnell in a statement Thursday. “This important update will cut refund time and reduce inconvenience for people who file amended returns. We always encourage direct deposit whenever possible. Getting tax refunds into taxpayers’ hands quickly without worry of a lost or stolen paper check just makes sense.”
The IRS originally started accepting the 1040-X electronically in 2020 but didn’t provide direct deposit as an option for a refund until now. After updates to the IRS’s technology systems, taxpayers who file amended returns electronically can now receive their refunds faster and more securely through direct deposit in their bank accounts. Taxpayers who file an original tax return via tax prep software can also file an electronic Form 1040-X if the software maker offers that feature.
Taxpayers can check the status of an amended return through the “Where’s My Amended Return?” tool on the IRS website.
Taxpayers will still have the option to submit a paper version of the Form 1040-X and receive a paper check. They can follow the instructions for preparing and submitting the paper form. However, direct deposit isn’t available on amended returns submitted on paper.
The IRS is estimating the current processing time as more than 20 weeks for both paper and e-filed amended returns, since processing an amended return is still a manual process even if it’s filed electronically. However, filing electronically eliminates the time for the IRS and U.S. Postal Service to sort through and deliver the mail, and including direct deposit information on an e-filed form provides a secure way to receive refunds more quickly.