While the IRS says that most refunds will be paid in 21 days, many tax filers are finding that it could take much longer. USA today recently reported that for some tax payers the wait for a tax refund has been over 12 weeks since filing! Far longer than a typical wait of under three weeks.
And getting a live agent has been enough tougher with the Washington Post saying that there’s only a 1-in-50 chance you’ll reach a human being! This has been especially frustrating for tax payers who have been unable to learn when their tax return might be processed or when they can expect to receive their refund.
Coupled with known IRS backlogs (now over 35 million according to the TAS), paying stimulus checks and processing issues the wait time to get your refund could stretch into months.
In fact the IRS has already had to extend the latest tax season by a month to catch-up on processing and allow tax payers to file their returns. This is evidenced by the IRS’ own data which shows they are over 7% slower than last year in terms of tax returns processed.
The big mess, which some are calling this tax season, has also resulted in nearly 10 million fewer federal income tax refunds being issued through the regular tax season — a 12%+ decline — compared with the same time last year. The average refund however of $2,888 is higher than last year.
Below is a table showing how long delays for certain tax filers, based on key filing items, could take this tax season.
“For about 25% of the returns flagged for income verification, refunds took longer than 56 days, and for about 18% of those flagged for identity verification, refunds took longer than 120 days.”
|Items Delaying Tax Refund||Expected Avg. Refund Delay (beyond 21 days)|
|Return Errors or Missing Data||+2 to 4 weeks|
|Have a EITC or CTC Payment||+3 weeks|
|Identity Verification (Fraud)||+6 to 8 weeks|
|Income Validation||+4 to 6 weeks|
|Tax Refund Offsets||+2 to 4 weeks|
The most common reason for delays in current and past tax seasons is due to a legal requirement (under the PATH act) that requires the IRS to wait for around 3 weeks after it starts processing returns to issue refunds to taxpayers claiming the earned income tax credit or the additional child tax credit. So if processing of normal returns is delayed then returns claiming these credits could be delayed further.
Missing or incorrect information can cause additional delays as may get sent for manual processing and the IRS will need to contact you by mail to get additional information to resolve the issue and process the return. This could take several weeks based on the issue. Do not file an amended return if you notice an error after filing and instead wait to hear from the IRS.
Similarly if the income you reported does not match what the IRS has from your employers (W2 employees especially) or your 1099 income raises red flags based on the occupation/jobs you are reporting, the IRS may require additional verification and processing. Like missing or incorrect information issues if items cannot be adjusted automatically by the IRS, it will delay any refund payments you are due.
The other common delay people are seeing is due to tax offsets which cannot only delay refund processing, but actually reduce the amount of your refund. Tax Refund offsets include items like unpaid child support, federal agency debt outstanding student loans or back state income tax.” You will however be notified if an offset is being applied to your refund or results in you having taxes due.
Missing stimulus check claims via a recovery rebate credit should not delay your return according to the IRS, but trying to claim an incorrect amount for you or your dependents could cause a delay in processing your return as IRS will have to adjust the refund payment (with an official notice sent) to reflect the correct amount.
The refund delay durations noted in the table above are all estimates based on anecdotal evidence and reader feedback. It should not be construed as official IRS data. I will keep updating the table as new information or noted delay data comes to hand and you can subscribe via the options below for the latest updates.