Anyone who electronically files an amended individual income tax return can for the first time select to have any resulting refund deposited into their bank account, the IRS said on Feb. 9.

Up until now, taxpayers who filed Form 1040-X, Amended U.S. Individual Income Tax Return, with the IRS had to wait for a mailed paper refund check, adding an extra step onto the amended return process. Now, those wanting to e-file Form 1040-X can select direct deposit and enter their banking or financial institution information for a faster refund.

Taxpayers file a total of approximately 3 million amended returns each year, according to the IRS.

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“This is a big win for taxpayers and another achievement as we transform the IRS to improve taxpayer experiences,” IRS Acting Commissioner Doug O’Donnell said in a statement. “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 began accepting Form 1040-X electronically in 2020 but had not offered direct deposit as an option for a refund until now, following updates to IRS technology systems. Taxpayers filing an original tax return using tax preparation software can file an electronic Form 1040-X if the software manufacturer offers that service.

Taxpayers can check the status of their amended return using the “Where’s My Amended Return?” online tool.

Taxpayers still have the option to submit a paper version of Form 1040-X and receive a paper check. They should follow the instructions for preparing and submitting the paper form; however, direct deposit is not available on amended returns submitted on paper.

Current processing time is more than 20 weeks for both paper and e-filed amended returns, as processing an amended return remains a manual process even if filed electronically, the IRS said. But e-filing and using the direct deposit option cuts out time a mailed paper refund check would go through the U.S. Postal Service system.

IRS
Taxes