There are tens of millions still waiting for the IRS to finish processing last years’ tax returns. Many of them have been waiting for almost a year. The delayed process means that refunds are delayed also. That can mean increased stress for a lot of people and businesses who rely on their refunds to catch up on bills or fill in a few gaps. How long will it take for the IRS to overcome the backlog? How will it affect the new tax season for those individuals and businesses submitting their 2021 returns? Here’s what you need to know about the IRS backlog and refund delays.
What is the Cause of the IRS Backlog?
The COVID-19 pandemic hit many businesses hard, and government agencies were not exempt. Extra duties due to the pandemic emergency relief programs overstressed an agency that was already facing severe budget cutbacks, stale hiring, and office closures. The IRS customer service center reportedly received over 280 million phone calls last year. Only about 11% of those were answered.
The goal, according to Charles Rettig, IRS Commissioner, the IRS backlog is supposed to be resolved by December. A strategic plan has been launched to handle the backlog. Part of that plan includes hiring about 10,000 new workers, paying overtime, and reassigning many of the IRS’ current employees to assist in processing tax returns.
How Long Until You Get Your Tax Refund?
Even though the IRS is experiencing an unprecedented backlog, most taxpayers filing electronically and opting for a direct deposit usually see their refunds within about 3 weeks after filing their return. Depending on your bank, the direct deposit often takes five more days before it clears. For those who submit a paper return, it takes six to eight weeks to receive a return. However, there is no guarantee that refunds will be issued inside those windows as other factors can affect or delay a refund.
Factors that May Cause a Delay in a Tax Refund
Besides the present IRS backlog, there are many other factors that could cause a delayed tax refund, including:
- An error on your return. The most common errors include an incorrect EIN or SSN.
- Failure to report a change of your name to the SSA.
- Filing paper returns.
- A return with incomplete information.
- Failing to opt for direct deposit.
- Reasons to suspect identity fraud or ID theft.
- A return that includes Form 8379 (Injured Spouse Allocation) can take an extra two weeks to process.
- Filing for an additional child tax credit or an earned income tax credit.
- Something in your return that needs further review.
- Filing an amended tax return (can take over 20 weeks to process).
Tracking Tax Refunds
You can keep up with your tax refund. The IRS2Go app lets you check your refund status on a mobile device. The app also allows payments so you can pay your tax bill using the app. The “Where’s My Refund?” portal also allows you to check your taxes at any time online once you have filed them. Both options update after your tax forms have been received. Please note that if you filed a paper return, it could take as long as four weeks for your refund progress to update.
Ways to Decrease Your Tax Refund Wait Time
Taxpayers don’t have a lot of control when it comes to their tax refund status. However, you may be able to expedite the process, so your refund comes in a timelier manner. Here are a few things you can do to help.
- File your taxes electronically.
- Always opt for a direct deposit into your checking or savings account.
- Don’t wait until the filing deadline, it’s better to file early.
- If the IRS contacts you to request more information, respond quickly.
And finally, make sure all the information on your tax return is accurate and there are no errors. When the IRS catches an error, unclear details, or missing information, they contact you. Then, they have to wait for your response. This can add days or weeks to wait times. An accountant is an invaluable tool when it comes to filing your taxes. Working with a tax professional reduces the chances of errors and makes sure any issues are addressed and resolved quickly.