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Haven't Received Your Tax Refund Yet?
Article Highlights
- Slow Refunds
- COVID-19
- Economic Impact Payments
- Recovery Rebates
- Unemployment Debacle
- Using 2019 Income to Compute 2020 EITC and Additional Child Tax Credit
- Other Issues
- Where’s My Refund Tool
- IRS May Pay Interest on Late Refunds
Economic Impact Payments – Congress ordered the IRS to handle the task of issuing three economic impact payments, two in 2020 and one in 2021, tapping IRS resources.
Recovery Rebates – To make matters worse, those first two economic impact payments had to be reconciled on the 2020 tax return, and if a taxpayer didn’t receive the amount they were entitled to, they were allowed an equivalent recovery rebate credit on their tax return. If there is a discrepancy between the amount of the payments reported on the tax return and what the IRS has on file for the economic impact payment amounts, the IRS is manually verifying the tax return for credit eligibility, which is delaying refunds.
Unemployment Debacle – In March 2021, Congress, after the 2020 tax filing season had gotten underway and millions of taxpayers had already filed their returns, decided to make a portion of the unemployment compensation taxpayers received in 2020 tax-free. The IRS, in order to avoid millions of amended returns from being filed, has undertaken the task of automatically adjusting those returns and issuing refunds.
Using 2019 Income to Compute 2020 EITC and Additional Child Tax Credit – The EITC and the additional child tax credit are based on a taxpayer’s earned income (income from working). However, because a preponderance of those who normally benefited from EITC and the additional child tax credit were unemployed during 2020, Congress allowed the 2019 earned income to be used in computing those credits for 2020, which also is causing processing delays.
Other Issues – Other issues that cause delays in disbursing refunds include returns that are filed with missing information, those affected by identity theft and fraud, those filed with an injured spouse allocation on IRS Form 8379 (which can take a minimum of 14 weeks to process) and returns that warrant further review for other reasons.
You can use the IRS’s online tool “Where’s My Refund” to determine the status of your refund. To use that tool, you will need:
- Social security number or ITIN
- Your filing status
- Your exact refund amount
- The return was filed.
- The return is received by IRS if it was filed after the due date.
- The IRS received the return in a format they can process. The IRS stops paying interest on overpayments on the date they issue the refund or it is used to offset an outstanding liability.
Exception: No overpayment interest is paid if the IRS issues the refund within 45 days of the return due date, or the actual filing date if later.
As you can see, refunds are not being issued as quickly as they were in years prior to COVID and there is not anything a tax preparer or taxpayer can do about the IRS not paying out refunds once a return is electronically filed and accepted by the IRS.
More About Us
Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)
Offices in Flemington, NJ and Califon, NJ
Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.
Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.
Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.
Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.
Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.
We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.
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