Delayed Refunds from IRS
The pandemic has been difficult for everyone, including the IRS. In June 2021, after most individual tax returns had been filed, the IRS had around 35 million unprocessed tax returns. The most recent update from the IRS discloses they have processed all returns received prior to April 2021 that needed no further review, with 12.7 million remaining unprocessed tax returns. The unprocessed returns include returns that have any adjustment to the Recovery Rebate Credits (i.e. if you should have received a stimulus payment but you didn’t) or if you claimed the Earned Income Credit or the Additional Child Tax Credit.
As a part of the backlog, any checks you mailed in may not have been processed. The IRS is asking that you don’t stop payment on your check and/or remit a new check. It can take up to 60 days for a check to be processed after it is received. If you cancel and send another check you are resetting the clock on when it will get processed. The IRS is forgiving any penalties resulting from the checks not being timely processed.
If your return is unprocessed, and you haven’t received your refund, it could take between 90 and 120 days to process your return. Returns are being processed in the order received. The IRS has a “Where’s My Refund?” tool on their website that allows you to track your return and refund. The tool is continually updated as your return goes through the process, so you should check it often if you are concerned about the status of your refund. Chances are this will not be resolved by next tax season, so be sure to work with your accountant to submit your return as early as possible.