You’ve likely already received your third stimulus check, but you may still be waiting for that other change that the IRS owes you: your tax refund.
The IRS has a backlog of 29 million returns that require manual processing, which basically means that a human must review them.
To be clear, most taxpayers who file electronic returns process their returns and receive their refunds within 21 days, according to the IRS. But if you’re still waiting and wondering “where’s my tax refund?”, Here’s what’s going on and how you can track it.
Why you haven’t received your tax refund
The 2020 tax season has been especially difficult for IRS staff and accountants.
As of March, the IRS still had a backlog of more than 2 million 2019 returns. Most of them are leftover returns filed by mail that accumulated last year when most IRS offices temporarily closed due to COVID-19. .
But on top of that, there are a number of complexities created by the three stimulus bills, the most recent of which passed in the middle of tax season. In addition to the usual tax season chaos, the IRS took it upon themselves to deliver the third stimulus check. Also, tax season started 16 days later than usual this year. These challenges led the IRS to extend the tax deadline to May 17.
For example, people who normally qualify for the Earned Income Tax Credit, a credit for low- and middle-income working families, may not have been eligible in 2020 due to expanded unemployment benefits. The $ 900 billion stimulus package that was approved in December changed the rules to allow families to use 2019 income to qualify instead of 2020 income.
However, the IRS did not have time to update its programs to reflect this change, so if you are seeking the Earned Income Tax Credit based on 2019 income, an IRS employee will need to manually review it.
The same applies if you qualify for stimulus money from the first two checks based on your 2020 return that you did not qualify for based on your 2019 or 2018 return. For example, if your 2019 income was higher than your 2020 income , you may qualify for more stimulus money. Or if you had a child in 2020, you would earn stimulus credits on their behalf. These situations also require a manual review.
But your tax refund could also be delayed for all the reasons that would apply in a normal year. For example, if your refund was sent to a bank account that you have since closed, the IRS will eventually issue you a paper check, but that increases the wait time. If someone fraudulently filed a tax return in your name to steal your refund, the IRS will think you have already filed it and will reject it. Your refund will also be delayed if you made a mistake or your return was incomplete.
If you owe certain types of debt, like child support or back taxes, the IRS could take your refund and use it to offset what you owe.
Paper returns require manual processing, so if you have filed on paper, expect a long wait, even if there are no problems with your return. The IRS is urging taxpayers who have not yet filed their returns to file online rather than by mail.
If you made a mistake that requires an amended return, your tax season will get even longer. The IRS will notify you of the error by mail and you will need to submit Form 1040X. There is only one way to do this: by mail. Then your amended return will be added to the more than 29 million raw returns.
What to do if you are still waiting
The first step is to make sure the IRS has received your return.
You can track your return using the Where’s My Refund feature on the IRS website or the IRS2Go app? You will need to provide your social security number, filing status, and the exact amount of your refund.
But these tools have limited utility. If your return has been processed, they tell you when your refund deposit is scheduled, but provide no information on why a return is still being processed or if you need to provide additional information, prompting recent criticism from the Taxpayer Advocate. Service.
If you filed your return electronically, you should be able to see if the IRS has accepted your return within 24 hours. If the IRS has accepted your return, that just means they have confirmed that you received it. The IRS has yet to process it.
If you submitted a paper return, you can wait a long wait before you can confirm that the IRS even has your return. Even under normal circumstances, tracking a paper return can take up to four weeks.
The IRS says its staff will help you investigate the status of your refund only if you submitted it electronically more than three weeks ago or mailed it at least six weeks ago, or if Where’s My Refund tells you to get in touch.
Considering that the IRS has only answered about 7% of individual taxpayers’ phone calls to date, it is quite difficult to talk to a human. Even if you are one of the lucky ones who communicates with a human, they probably won’t be able to give you much information. IRS systems do not tell employees handling phone calls why a return requires manual processing. But if you want to try, the number to check the status of a refund is 800-829-1954.
What to do if you haven’t applied yet
The big bottom line if you haven’t applied yet: e-filing is the way to go. There are many easy-to-use tax software options, many of which have free versions.
Not only will you get your refund faster, but you are also less likely to make mistakes that could result in more delays because the software is doing the math for you. Plus, filing electronically is safer than putting all that personal information in an envelope.
And of course, the sooner you submit it, the better. It usually takes longer to get your refund as Tax Day approaches, so stop the delay and set aside time for an appointment with the tax software of your choice.
Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Write Dear Penny’s personal finance advice column. Send your misleading money questions to [email protected]