If you are a taxpayer who is waiting for a tax refund, you want your money. And quickly. If there are delays, many taxpayers want to know “why is my tax refund taking so long?”
Tax Refunds Taking Longer Than Ever
According to multiple local tax preparers, they are seeing a delay in the processing of tax returns. In some cases, it may take months before the money ends up in the taxpayer’s bank account.
In fact, things are such that some who have been tax preparers for decades are saying that the recent delays in tax refunds is highly unusual. They haven’t ever seen a situation like this before. And it’s not just that there are delays with refunds. Even getting in touch with someone at the Internal Revenue Service to discuss a tax matter and get answers is proving difficult.
These delays are not just at the federal level. Some financial planners and tax pros are seeing delays in state tax refunds as well. This is especially true in the cases of more complex tax returns. There have been long delays in processing types of returns where there are things such as multiple sources of income, unemployment, and rental property.
Why Is My Tax Refund Taking So Long?
The Internal Revenue Service (IRS) released a statement saying that there are multiple factors that affect the timing of the refund after they have received the returns. Even though they issue most refunds in less than 21 days, it is possible that some refunds may take longer.
People who have not yet received their refund after 21 days may be wondering where it is now. Here are some possible reasons as to why it is taking so long according to the IRS website:
- Your tax returns have errors such as incorrect Recovery Rebate Credit
- Your tax return is incomplete
- It is affected by identity theft or fraud
- Because your tax return includes claim filed for an Earned Income Tax Credit or an Additional Child Tax Credit
- Because your tax return includes Form 8379 (PDF), injured spouse allocation which can take up to 14 weeks to process
Why This Year Is Different
The reason why issuing tax refunds is delayed this year is because it is caused by the Covid19 pandemic. The IRS operated at limited capacity which slowed down the process of tax returns and created a massive backlog. To add to that there are also the three rounds of stimulus payments, tasks related to the implementation of the new tax laws, and difficulties with paper-filed returns that the IRS has to deal with.
Even though the IRS is operating at a more normal capacity now, they still have a lot to do as far as processing mail, tax returns, payments, refunds, and correspondence. All while their resources are still limited. This is one of the reasons why there are delays in tax refunds.
If the delay in your tax return is because of tax correction to a recovery rebate credit, earned income tax, or additional child tax credit claimed on your return, the IRS will send you an explanation. If there is a problem that needs to be fixed, the IRS will attempt to fix the problem without contacting you. However, if they need more information, they will write you a letter.