Can Amended Returns Be Direct Deposited?

An amended tax return, officially known as Form 1040-X, is used to correct errors or make changes to a U.S. Individual Income Tax Return (Form 1040, 1040-SR, or 1040-NR) that has already been filed. Taxpayers might file an amended return for various reasons, such as correcting income reporting errors, claiming missed deductions or credits, or updating their filing status or dependent information. This process ensures accuracy and compliance with tax laws, potentially leading to a larger refund or a reduced tax liability. It is advisable to amend a return if a significant change impacts your tax outcome, rather than for minor mathematical errors which the IRS often corrects automatically.

Direct Deposit for Amended Returns

Historically, receiving a refund from an amended tax return meant waiting for a paper check. However, this policy has changed for electronically filed amended returns. For tax years 2021 and later, if you electronically file your Form 1040-X, you can now opt for direct deposit of any resulting refund.

This improvement allows taxpayers to receive their refunds more quickly and securely, similar to the process for original tax returns. The option to choose direct deposit applies to electronically submitted amended returns, where you can enter your banking information during the e-filing process.

Direct deposit for amended return refunds addresses the extended wait times often associated with paper checks due to the manual processing of these forms. While the processing of an amended return remains a manual process, direct deposit eliminates the additional time associated with mail delivery. This update benefits the approximately 3 million taxpayers who file amended returns each year.

Receiving Your Refund from an Amended Return

When a refund is due from an amended tax return, the method of delivery depends on how it was filed. If you electronically filed Form 1040-X for tax years 2021 and later and provided your bank account details, the refund will be sent via direct deposit to that account.

If you filed your amended return on paper, or if it’s for a tax year prior to 2021, the Internal Revenue Service (IRS) will issue any refund as a paper check. This check will be mailed to the address on file. Paper checks introduce additional time for mailing and carry a risk of being lost or stolen.

The IRS encourages direct deposit for its speed and security. If your amended return results in a larger refund than your original return, you will receive the difference as an additional refund. Conversely, if the amendment leads to a smaller refund or an amount owed, you would pay the difference.

Tracking Your Amended Return Refund

After filing an amended tax return, taxpayers can monitor its status using the “Where’s My Amended Return?” online tool provided by the IRS. This tool is accessible on the IRS website and allows you to track Form 1040-X for the current tax year and up to three prior tax years.

To use the tool, you need to provide your Social Security number or Individual Tax ID Number, date of birth, and ZIP code. It typically takes three weeks from the submission date for the amended return to appear in the IRS system and become trackable. The tool provides updates on the return’s status, indicating whether it has been received, adjusted, or completed.

Processing times for amended returns are generally longer than for original returns, ranging from 8 to 16 weeks, though some can take 20 weeks or more. Factors that can extend processing times include errors, incomplete information, missing signatures, or if the return requires additional review due to complexity or specific forms like Form 8379, Injured Spouse Allocation. While electronic filing reduces mailing time, the manual review process for amended returns does not significantly shorten the overall processing period compared to paper filing.