U.S., State Tax Refunds Up in ’99

Taxpayers received larger refunds and got them more quickly this year, according to data released Wednesday by the Internal Revenue Service and the state Franchise Tax Board.

Tax breaks such as the new $400 child credit, credits for education and deductions for student loan interest helped boost the average federal income tax refund by 15.1% to $1,550. Though the state offered fewer new breaks, it matched some of the federal changes and thus California refunds grew by 21% to $436.

Taxpayers speeded those refunds along by using electronic filing and direct deposit in record numbers.

Nearly one in four federal returns, or 22.9 million, was filed by computer--a 25% jump from a year earlier.

On the state level, more than one in six returns was filed electronically, compared with one in 10 in 1998.

The growth in e-filing more than made up for the decline in telephone filing. About 7% fewer filers opted to file by phone on the federal level and 12% fewer on the state.

One in five taxpayers nationally opted for direct deposit of the refund, up from about one in six last year.

Electronic filing and direct deposit cut the average processing time of a federal refund to less than three weeks, compared with six to eight weeks for a mailed return.

Both the IRS and the FTB also accepted credit card payments for the first time this year. More than 50,000 people paid their federal bills by MasterCard, American Express or Discover, the three cards authorized by the new program.

The state had a similar but much smaller pilot program, which allowed residents with past-due tax bills to pay by credit card. As of Tuesday, the state had received 1,713 payments totaling $1.56 million. The average payment was $906, with the largest single payment being $15,152.