Hallelujah, it’s Raining Refunds: States Begin Sending Delayed Tax Refunds
by Bob Williams
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If you saw our last blog post on state tax refund delays, you may have realized that some of the delayed refund processing dates have already come and gone with no refund in sight. What gives?
Don’t worry – we’ve got your back. As with our last post, we’ve surveyed the websites of the states with personal income tax for news of further delays, starting with the ones that had originally specified dates for processing refunds:
States with overdue refund-processing dates
Delaware – Initially, the Delaware Division of Revenue delayed processing of refunds until after Feb. 20. Since that date has come and gone, the state seems to be processing its refunds more or less normally now.
Kentucky – The Department of Revenue delayed individual tax refunds until after Feb. 15. But some Kentucky taxpayers also got a letter from the DOR asking them to take a short online survey that would confirm their identity. If the taxpayer failed the test twice, or did not take the quiz, the DOR would require additional documentation such as hard copies of W2s or 1099s before processing the return.
New Jersey was the late starter in this year’s tax race, staying at the starting line until March 1. Now that returns are being processed, though, electronic filers are being told their refunds could take four weeks to be issued. File on paper and that refund could take 12 weeks to show up.
Vermont started processing state income tax returns the first week of February. But the Department of Taxes’ website cautions taxpayers that “we may hold some returns until we receive W-2 withholding reports from employers.” Vermont has installed a new computer-based anti-fraud system called VTax that uses a toolkit of applications to spot fraudulent returns.
States without specific refund-processing dates
The other states in our informal survey didn’t set a specific start date for processing, but did alert taxpayers that state income tax returns could face delays before refunds were issued:
Arkansas – The Department of Finance and Administration said only that “certain refunds” may be delayed for security reasons.
Colorado – The website warns that any state refund could be delayed as long as 60 days beyond the normal time.
Georgia – The website initially warned that individual state refunds could be delayed as many as 90 days before the payment is actually received.
Iowa – The DOR is holding EITC refunds until early March.
Louisiana – Expect processing of Louisiana individual income tax returns to take up to 60 days to complete processing.
Massachusetts – With one of the longest delays we found, Massachusetts returns could take four to six weeks to process.
Mississippi – The Department of Revenue’s statement says it all: “The DOR does not guarantee a specific date that a refund will be deposited into a taxpayer’s financial account.”
Minnesota - The Minnesota Department of Revenue site cautions that some returns may take longer to process: “Returns may take longer to process because of the increase in attempted refund fraud due to scams, stolen personal information and identity theft. The department will take the time necessary to review returns to make sure taxpayer dollars are not getting into the hands of criminals.”
Montana – The initial warning was that e-filed returns would take up to four weeks to process. But some Montana taxpayers got letters from the DOR saying their returns had been flagged so that taxpayer identities could be verified. The verification process could be completed online or on paper. Montana says its computer system picks up factors in e-filed returns that indicate possible identity fraud. Those returns are flagged and require identity validation before a refund can be issued.
North Carolina – Individual income tax returns could take an average of six weeks to process, but the DOR cautions it could take longer, depending on the return.
New Mexico – State tax refunds could take up to 12 weeks to be released, depending on when the return is e-filed.
Virginia – Expect e-filed returns to take up to four weeks to be processed. It should be noted that the Virginia Department of Taxation says individual income tax returns are due by May 1.
West Virginia – Like the other states, West Virginia is sending verification letters to some taxpayers. All individual income tax returns, with or without verification, could take up to four weeks to process.
As security threats grow, we can expect measures like these to become the norm rather than the exception: Any method of blocking identity theft or tax fraud will inevitably be challenged by fraudsters with a creative streak, but we’ll keep you up to date with what you need to know about new security measures, including delayed refunds.
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