The deadline to file Iowa income taxes is today. How quickly should you expect a refund?
Remember last year and the year before, when because of the pandemic, the deadline for filing your income tax returns was repeatedly extended?
Well, forget about it. The deadline for filing your U.S. tax returns this year is back to normal — almost. Though it's not the traditional April 15, it's just three days later: April 18. So if you haven't gotten started, it's time to get to work or file for an extension.
You have a little more time on your Iowa tax return. The deadline to file it, or an extension request, is May 2.
More: 2022 tax guide: Key dates for filing and extensions, claiming credits and planning for refunds
How long will it take for tax refunds to arrive?
Tax professionals say federal income tax refund money typically won't arrive until two weeks or three weeks after a tax return is processed.
The IRS noted that most tax filers who have no issues will receive their federal income tax refund within 21 days of when they file electronically, if they choose direct deposit. The IRS said that's similar to previous years.
More: IRS says stimulus check mistakes are among reasons for tax refund delays
The Iowa Department of Revenue says on its website that most state tax refunds will be processed within 30 days, with most issued before the end of May.
To track an Iowa income tax refund, go to idr.iowa.gov/wheresmyrefund.
Tax refunds up from last year, IRS says, thanks in part to child tax credit
Even if getting your federal return ready will take a chunk out of the coming weekend, it may be time well spent. Tax refunds are averaging $3,226 so far this tax season. That's 11.5% higher than last year, according to data from the U.S. Internal Revenue Service.
One reason is a more generous Child Tax Credit. In 2021, the credit increased to $3,600 per child under age 6 from $2,000 in 2020.
Parents of children ages 6 to 16 also received an increase in 2021 to $3,000 per child, up from $2,000 in 2020. Taxpayers in 2021 were able to receive up to $3,000 for 17-year-olds.
How the credit impacts your refund depends on whether you took advantage of the monthly advance of up to $250 per child ages 6 to 17 or $300 for each child under 6.
More: Not ready to file your taxes? Here's how to get an extension
Families that received the payments, which started in July and ended in December, can file for the remainder of the credit on their 2021 tax returns. Depending on how much they owe, the credit could trigger a tax refund.
Taxpayers who did not receive advanced payments can claim the entire credit as a lump sum when they file their taxes.
If you opted for advanced payments and are claiming the same credits as last year, your refund should roughly mirror last year's, said Kris Cox, deputy director of federal tax policy at the Center on Budget and Policy Priorities.
"It’s important to remember that even for people who claimed the advanced CTC payments it’s not that their refunds are smaller on an annual basis, it’s that they already received half of their CTC refund in advance last year," Cox added.
Those who qualify for Earned Income Tax Credit may see boost
For workers without children, or with dependents 19 and older (excluding students), the Earned Income Tax Credit (EITC) also as expanded in 2021. The credit previously was limited to low-income taxpayers ages 25-64 without dependents.
"Even for people who were previously eligible, the maximum credit amount tripled from almost $500 to roughly $1,500, significantly increasing the credit for many people," said Cox.
Another potential refund booster is a rule passed in the American Rescue Plan that allows taxpayers to use their 2019 income to compute their EITC payment if it was higher than their income last year.
"In some instances, this option will give them a larger credit," the IRS said in a post.
If your income meets the guidelines, you could be eligible for up to $1,400 if you're a single filer or $2,800 if you're married and filing jointly. Single and joint filers also are eligible for an additional $1,400 per dependent, including adult dependents,.
If you didn't receive a stimulus payment or if you had a baby in 2021 you can claim a Recovery Rebate Credit, which will then be added to your 2021 tax refund.
"Tax filers should make sure they have IRS letter 6475 that reports how much stimulus payment they received, so you can enter the correct amount and claim any additional stimulus in the form of a Recovery Rebate Credit they’re eligible for when they file their taxes," said Lisa Green-Lewis, a CPA and tax expert with TurboTax.
More: Missing a stimulus check? IRS Letter 6475 can help you claim Recovery Rebate Credit
"As more tax returns are processed the reported average refund could decrease," she added.
Tax refunds for next year are set to be smaller if Congress doesn't extend legislation to enhance CTC and EITC payments as well as other COVID-era relief programs, Cox said.
When will Iowa's flat tax kick in?
Next year, Iowans will start seeing changes in the state's tax as it begins a gradual move to a flat 3.9% income tax and eliminating taxes on retirement income like 401(k)s, IRAs and pensions tax.
Here's how the rates will change:
2023 —The top rate will lower to 6%, giving a tax cut to Iowans making $75,000 or more.
2024 —The top rate will lower to 5.7%, giving a tax cut to Iowans making $30,000 or more.
2025 —The top rate will lower to 4.82%, giving a tax cut to those making $6,000 or more.
2026— The top rate will lower to 3.9%, applying the same rate to all taxpayers.
Editor's note: This story has been updated to reflect the correct filing deadline for state tax returns.
USA Today staff writer Elisabeth Buchwald and Des Moines Register staff writer Stephen Gruber-Miller contributed to this article.
This article originally appeared on Des Moines Register: When’s the deadline to file 2022 taxes? What Iowans need to know
