In normal circumstances, most people would have received their tax refunds just after 21 days of filing electronically. 2021 however is not a normal year. With the pandemic and most people working from home, it is expected that one or two things will be delayed and the IRS is no exception. The IRS has been dealing with a backlog of paperwork and tax returns to process from last year, given the fact that the pandemic sent a lot of workers home, which only meant a delay for this year’s tax filing season until Feb-12.
This delay was to give the IRS the time to adequately prepare for the changes in the tax law from the Dec 27 relief package. While IRS would later accept the 2020 tax returns, Congress made some changes on March 11 and this included a $10,200 tax exclusion from the unemployment benefits following the numerous filings that were made, which further caused additional delays. In addition to the filings, the IRS was also mandated with distributing the stimulus package from the relief bills.
If you are still waiting for your tax refunds, here are some things you need to keep in mind.
If you filed electronically it should take 21 days to receive your refund
If you filed your tax refunds electronically with a direct deposit made to your bank account, it would take 21 days for you to receive the refund. Supposing you made an e-file but then you were requested for a paper check, it would take you up to a month to receive the refund. Keep in mind that this time period could take longer and can expand significantly to even two months or more.
If you made a mistake on your paperwork, the tax refund could take longer, especially when the income reported doesn’t match with the W-2s or the 1099s the IRS received for you or if the return was affected by the recently made laws.
Checking the status of your refund
Through the IRS’ Where’s my Refund? tool, you can check the status of your refund just after 24-hours of making your application. If you made a paper application, you will not be able to check the status of your filing until four weeks after filing or even wait a little longer. The Where’s My Refund tool will help you know if the return has been received, if it has been approved and if the refund has been sent to you.
Why your Tax refund has been delayed
There are several reasons why your tax refund may have been delayed. Your refund may have been delayed if you filed too early or even waited until the last minute to make the application, the last-minute changes to the tax code could also have triggered an error on your return which automatically meant a slowed-down process. Additionally, when you wait until the last minute to make the application for the tax refund, it means you have to wait longer because the IRS could have been clogged up with a larger than usual volume of returns. But beyond these obvious reasons, some of the most common causes of the delay could be;
The tax return application contains errors
If your tax refund application contains errors and other numerical mistakes, this could slow the pace of your refund processing. When the error has been detected, the application is earmarked for a human review, which means, an IRS employee has to sit down and look at the application carefully to determine the source of the error, which may take some time.
An incomplete return
This is another common source of delay in tax refunds. Having an incomplete refund application will trigger the IRS review. This means additional time processing the request. It is more common with paper filing where if you forgot a key piece of information for instance your Social Security Number or even failed to sign your tax forms, this could prompt a delay in the process and the IRS will not process the return until the corrections are made.
Tax fraud and other suspicious activities
If you are a victim of tax fraud, the IRS will take longer to process your request. One of the most common ways that you could end up being a victim of tax fraud is when a person is using your personal information to file a fraudulent tax return and claim a refund in your name.
The recovery rebate credit doesn’t match
These cases were more common last year. If you never received the full stimulus payment you were eligible for in 2020, you could claim additional money, called the recovery rebate credit when you filed your 2020 tax return.
However, it is important to know that the IRS has indicated that refunds will take up to 21 days if you claimed a rebate credit and the amount claimed does not match up with what the IRS calculates you are eligible for. In that case, the IRS will have to manually review the tax refund application which may take up to 14 business days to receive your refund.
It takes longer for the IRS to process paper returns which only means that right now, it will take longer as most IRS employees are working from home. Under normal circumstances, a paper refund will take weeks before you received the refund, but today, the process could go on for months. The process could further be delayed if your application has errors or inconsistencies.
These are some of the things you need to know when it comes to tax refunds. In addition, the delay in refund may be because you filed late or the refund was lost in the mail. It is important that you frequently use the Where’s My Refund? The tool provided by the IRS, but if it is not offering much help, always visit your local IRS office for help and clarification.