Tax Day comes around every April 15 – or a little later if that day falls on a weekend. Taxpayers in the United States can file their returns at any time between when the IRS starts accepting them and that deadline.
If you don’t have the financial documents ready by April 15, you can opt for an extension. That won’t relieve your responsibilities if you owe taxes, but it could delay a potential refund.
When you know that you have money coming back to you, it makes sense to prepare and file your taxes. What happens if your refund looks like it has been accepted, but the government hasn’t approved its disbursement?
Why Hasn’t My Tax Refund Been Approved?
When a tax return is accepted, the Internal Revenue Service receives the documents or e-file and reviews the information. A refund is not approved until the financial data is verified. The government looks for back taxes, unpaid child support, and other obligations that could reduce the refund amount.
The Internal Revenue Service (IRS) says that most refunds are received within three weeks from the time a return is accepted.
When the IRS accepts a tax return, it means that the initial inspection of the documents passed. The information that gets reviewed during the first step includes your name and address, claimed dependents, and other contact information.
Once the tax return reaches the acceptance status, the next step is to have the IRS approve the refund.
The refund option you prefer must be selected on the tax return for the money to be approved and issued. If you don’t choose a way to receive your money, there could be significant delays in processing the tax return.
For most people, the fastest way to receive a refund is to authorize a direct deposit from the IRS. These funds appear as an ACH transaction in most accounts.
You can opt to have a check issued for the refund. When you file a tax return with some agencies or software providers, a debit card is another possibility.
Did Your Claim EITC or ACTC on Your Tax Return?
EITC stands for “Earned Income Tax Credit.” It helps workers with low or moderate incomes receive a tax break if they have a family. People who qualified for the EITC in 2021 had to be working and have an earned income under $57,414. Additional qualifiers include a valid Social Security number and investment income below $10,000 for the tax year.
ACTC represents the “Additional Child Tax Credit.” It refers to a refundable amount that individuals receive if their child tax credit is more than what they owe for the year’s income taxes.
In 2021, the IRS announced that it wouldn’t release refunds until February 15, even if filers sent in their documents early. That led to a delay of about eight weeks for some families.
Delays can also occur when the IRS needs to verify the information in the EITC and ACTC. This issue typically occurs for individuals with self-employment income. A review of the filing documents for errors can take 4-6 weeks to complete.
Did You Pay Tax Preparation Fees from Your Refund?
Many people use tax filing software to prepare their returns each year. Products like Intuit’s TurboTax make it easy to e-file because the information gets put onto each document line automatically. All you need to do is answer the questions that come up during the preparation process.
Tax filing software is typically available around the first of the year for each new tax season.
Although filing online is free for many people, there can be a cost for those with complex tax returns. If you have self-employment or at-home business income to report, the cost to prepare the documents is often between $100 to $200.
Instead of paying that amount right away, you can choose to have the money taken out of your tax refund.
This issue creates a delay because the funds go from the IRS to an intermediary bank. That institution is responsible for deducting the fees. Then they send the remaining funds to your account with a second follow-up deposit.
Why Is My Tax Refund Delayed, Even If I Filed on Time?
If you expect to receive a tax refund and it hasn’t arrived within the 21-day window the IRS recommends, there could be one or more reasons why it hasn’t been processed or delivered.
The first step of this process is to check your current refund status. Here are the ways you can take care of this initial query.
- You can download the IRS2Go mobile app, visit the IRS.gov website and click on the “Where’s My Refund?” link, or call the refund hotline at 1 (800) 829-1954.
- Provide the information requested so that the government can track the current status of the refund.
- Review the answer provided.
It can take up to six weeks after mailing your tax return for the refund status to receive an update. When you file paper documents right at the deadline, it can be eight to 12 weeks before you’ll receive any information.
After you discover the status of your refund, you can begin narrowing down what might have happened to it.
Here are a few of the common issues that can cause your refund to be delayed after your return is accepted.
1. The Check Got Lost in the Mail
This issue happens more often than people realize. Although mail delivery is incredibly reliable, there are times when items slip through the cracks. It’s unfortunate when your refund check becomes part of that statistic.
If you haven’t received your refund check ten business days after the IRS says it was released, you’ll need to contact the agency to begin a trace. There is a possibility that someone stole the money by impersonating your identity.
2. A Refund Was Already Issued
Some people are the victims of identity theft. Scammers file a false tax return with the IRS to get a refund check issued, which they steal by impersonating you at the bank. If this happens and you file the real return later, there may be several steps to follow to receive your genuine refund.
- If you receive a 5071C, 5747C, 6331C, or 5447C letter, you will need to use the ID.me service through the IRS.
- Some people receive a 4883C or a 6330C letter. You’ll need to follow the instructions given in that document and cannot use the online service to verify your identity.
- You may need to send photo identification with current information as part of this process.
- The IRS will ask questions about your tax return from the previous year.
You might need to schedule an appointment with your local IRS office to verify your identity in person if it isn’t possible to do it online or over the phone.
Once your identity is verified, the IRS will continue processing your refund. This issue may require you to take additional steps when filing future tax returns to ensure the problem doesn’t happen again.
3. Too Much Time Expired
The IRS has a two-year and three-year rule in place that limits the amount of the refund you can receive. Claims for refunds or credit after this time are limited to the portion of the tax paid preceding the filing.
Even if the amount is over that figure and correct, you can only receive the tax amount paid because there cannot be a balance on the account.
Otherwise, additional interest or penalties could occur, especially if there is an outstanding balance from other years.
4. It Offsets a Debt
If your student loans are in a default status and owned by the government, a tax refund is used to pay down that amount. This issue also applies when child support is owed from a court order.
Some people might owe taxes from a previous year. If you have a refund in the current tax return, the funds could be held to manage that balance.
You will receive a notice in the mail that the refund was sent to cover those obligations if they exist. It can take some time for the paperwork to get to you, so it looks like your refund was accepted, but never distributed.
The only way to avoid this problem is to pay off the obligation. If you have student loans, it is possible to rehabilitate them by entering into an agreement to pay consecutive on-time installments. Your refund might be issued if the issuer accepts the arrangement.
How Can I Expedite a Tax Refund?
The IRS typically releases a refund within a specified time. As a general rule, the agency needs about two weeks to process the documents electronically and six weeks for a paper return.
The PATH Act created more changes to the refund process that took effect during the 2017 filing season.
Even if someone experiences a financial hardship because they don’t have access to their funds, the IRS cannot expedite the check or deposit until after February 15 each filing year.
If your tax refund is held up by a temporary processing backlog, you might be able to get your money sooner by telling the IRS you have a financial hardship.
Evidence of this issue, such as not having the money to pay rent or buy medicine, could be required.
The IRS can manually process some refunds to get you the money sooner in these situations, but the outcome is not guaranteed.
How to Contact the IRS About a Refund
The easiest way to speak with the IRS about a refund when the checking tool doesn’t provide helpful information is to call the agency’s toll-free line. Representatives must verify their identity before discussing the situation, so it is essential to have the following items ready before the conversation.
- Your birth date and Social Security number (SSN).
- Without an SSN, you’ll need your individual taxpayer identification number (ITIN).
- The filing status of the tax return in question (single, married filing jointly, married filing separately, or head of household).
- Information from the prior year’s tax return – often the adjusted gross income.
- A copy of the tax return that you’re contacting the agency about that day.
- Any letters sent to you – the IRS almost exclusively uses letters to communicate with people.
During the filing season, which lasts from January to April, the average wait time for a customer service agent with the IRS is about 13 minutes.
The busiest time is around the lunch hour, where it can be 45 to 60 minutes before you can speak with someone.
Mondays and Tuesdays tend to be the busiest days with the IRS. You’ll also find longer wait times around the April filing deadline and during the weekend of Presidents’ Day.
Wait times are usually even longer in May, often averaging 19 minutes or more.
If you don’t have the information available, you’ll need to secure it and call the toll-free line another time with the data. Hours are from 7 AM to 7 PM local time.
Why Am I Not Getting My Tax Refund This Year?
The IRS reviews tax returns for errors and misinformation outside of the auditing process. Anyone experiencing a delay may have had an issue with the documents submitted. Letters are typically sent to communicate this issue, but some taxpayers might not receive an update until a resolution is reached.
During this past tax season, I submitted my return using a popular tax preparation software app. It was a straightforward experience, and I had everything finished in about three days.
After waiting for three weeks to get my refund, I checked on its status. The IRS told me that not only was it approved, but it had been issued.
I had selected the direct deposit option. What I didn’t know was that the agency had edited my return for errors and issued a $49 check. I had to wait for the refund I was expecting, then the extra amount they sent.
If you have any questions about your tax refund, call 1 (800) 829-1040 for more information if the checking tool isn’t helpful.
