Wondering why it’s taking longer to get your tax refund this year? While the IRS aims for a turnaround of under three weeks when issuing refunds to those who electronically file their tax return, this year could result in a more drawn out, frustrating process for many.
If you’re dealing with a longer wait, here are three possible reasons why you haven’t yet gotten your refund:
- Errors: Delays may be likely if your return includes errors or is incomplete. For example, if there is a discrepancy between what you reported on your return and what was reported to the IRS under your Social Security number, it likely will require some additional time to reconcile the differences.
- Concerns of fraud: A return with items the IRS has determined are associated with a high frequency of tax fraud can result in longer processing time. This delay gives the IRS the time needed to complete the extra steps necessary to ensure the return’s validity. The most common are returns that include an Earned Income Tax Credit (EITC) or an Additional Child Tax Credit (ACTC). Additionally, the IRS is allowing taxpayers to use their 2019 earned income, rather than 2020, to calculate the EITC or ACTC because of the COVID-19 pandemic. That could result in extra time being allocated for verification.
- Reconciling pandemic-related aid: Another new item for 2020 returns which may delay processing times is the reconciliation of Economic Impact Payments (EIPs) made to individuals in 2020 as a part of COVID-19 relief efforts. If you didn’t receive an EIP, you may be eligible for a Recovery Rebate Credit on your 2020 tax return. A common issue is a discrepancy between the Credit claimed on your return and the credit you qualify for based on information in the IRS system.
What should you do if you’re waiting for your refund? If it hasn’t been 21 days since e-filing your return, the IRS asks that you check your return status using the online Check My Refund Status tool. If it gives you a status update that indicates your return is being processed, your best bet is to simply be patient. It may only be a short time before your see your refund posted to your account. After 21 days, the IRS recommends that you contact them.
We understand that times are tough and every dollar matters! At Padgett, our network of CPAs, enrolled agents and other tax professionals can help you with your tax return. Get in touch with us to set up a consultation.