Why is My Tax Refund Delayed?

Tax refund money can be a really great bonus after a year of paying taxes. Who doesn't want a little extra money coming in at the beginning of the year?

For some people, this tax refund money can be extremely helpful to receive at the beginning of the year. It can go toward something more expensive that you need, it can help pay rent, or it can even add to your savings account. 

When you find yourself waiting on a lengthy IRS refund delay that can be stressful, worrisome, and even frustrating. There are several reasons why a tax refund delay might occur.

Some IRS refund delays could be caused by tax return delays, manual reviews, or math errors. But some tax refund delay reasons can be completely out of your hands and beyond your control.

When Should I Receive My Tax Refund?

How long it takes to receive your tax refund depends on several factors like how you filed and how you requested to receive your refund. Ask yourself the following questions because they are the first factors that will go into how quickly you get your refund. 

• Did you file electronically? 
• Did you paper file? 
• Did you set up direct deposit? 
• Did you request a paper check? 

If you filed electronically and set up direct deposit, then your tax refund will get to you the fastest. Tax filers who do this can expect to receive their tax refund money in about 21 days. 

If you did paper filing and requested a paper check, then your tax refund will get to you the slowest. Tax filers who do this can expect to receive their tax refund money in 1 to 2 months.

If you did a combination of these, like you filed electronically but you requested a paper check, or you paper filed but you set up direct deposit, then you can expect to receive your refund somewhere between these two time frames. You could get it as quickly as 21 days or as slowly as 2 months or more. 

However, if you take out a tax refund advance, then you can get the money from your tax refund right away. 

Why is My Tax Refund Delayed?

There are a few reasons for tax refund delays. They could be caused by you: maybe there was an error in your filed return, maybe you needed to resubmit an amended return, maybe you claimed the earned income tax credit, or maybe you or your tax professional made a simple math error. But IRS refund delays can also be out of your hands: there could be recent law changes, or tax backlogs like the 2020 tax refund delay or the tax refund delays of 2021.

This most commonly happens when something in the world, like tax law adjustments or pandemics, creates tax delays that then result in IRS tax refund delays. 

IRS Tax Return Delays and Tax Backlogs

One of the reasons your tax refund might be delayed is if the IRS is overwhelmed with a backlog of tax returns. Backups like this could happen when law changes affect how taxes are dealt with. This could also happen when the IRS has more work to do, like sending additional stimulus payments to taxpayers.

A higher amount of paper filers can also back up the work of the IRS, as paper filing takes longer for the IRS to go through than electronic files. Paper filing requires manual review, while electronic filing is more streamlined. 

For instance, during the 2020 tax refund delays, the IRS had a backlog of tax returns from the 2020 tax year to finish filing and sending refunds for because of the 2020 COVID-19 pandemic. Some tax policies changed with the addition of the American Rescue Plan. This plan added to the workload of the IRS, like with the sending of stimulus payments, causing a bit of a tax refund delay. 

The 2021 tax year is also experiencing a similar problem with backed-up tax returns and thus backed-up tax refunds. 

Paper Filing vs Electronic Filing

Paper filing takes longer than electronic filing. It can take longer for tax preparers or taxpayers to finish paper filing than electronic filing too because it requires manual filing and manual review. But it also takes longer for the IRS to go through the paper tax returns they receive. So, if you paper filed your taxes instead of e-filing, then your tax refund could be taking longer.

Tax Checks vs Direct Deposit

Paper checks, or tax checks, take longer to get to you than a direct deposit. Direct deposits are almost instant, while paper checks have to be created and then sent through the mail. Direct deposit involves giving the IRS the routing and accounting number of your bank account.

Then, all they have to do is send your tax refund money to you directly into your bank account. 

But if you don't have a bank account and need to receive your refund as a tax check, that could make it take longer to get to you because they have to send it in the mail and the post office has to take some time to get it to your physical mailbox.

This can take longer but if you do get a tax check, you can cash them at Check City the same day you get it in the mail.

Tax Law Changes

Tax relief packages and other law changes can make tax refunds take longer. This is because the IRS has to accommodate new laws and policies in the way they process everyone's tax returns and refunds.

Sometimes these laws can even change during tax season, which makes things difficult for the workers at the IRS because then they have to adjust their filing in the middle of tax season.

Some of these laws, like the American Rescue Plan, included stimulus checks. This gives the IRS more work to do than they usually have so their bandwidth for getting things like your tax refund done can take longer.

Tax Return Mistakes

Did you make a mistake on your tax return? This can make it take longer for your return to get processed and for your tax refund to get sent. The following list includes the mistakes you could have made on your tax return:

• Did you report the wrong income? 
• Did the income you reported not match your W2s and 1099s?
• Did you make a math error when making calculations?
• Did you try and claim a dependent that has already been claimed by their primary guardian?
• Did you try and claim other tax credits or make tax deductions that you don’t actually qualify for? 
• Did you forget to put down your Social Security Number? 
• Did you forget to fill out a section? 

Copies of your W2s and 1099s get sent to you and the IRS. So if you input numbers that don’t match those documents, the IRS will see this and need to look into the error before they can finish filing. 

If something is wrong or off about your return, then you could potentially get contacted by the IRS for more details or to get the error correct. 

NOTE: The IRS will always send mail to contact you, never a phone call or text message. Be aware of tax scams trying to impersonate the IRS and always double check that a contact from the IRS is legitimate before responding. 

How to Check My Tax Refund Status

Thankfully there are secure ways to check your refund status with the IRS. They have a tool called the Where's My Refund Tool. Go to this site and click on the "Check My Refund Status" button. To check your status using this tool, enter your social security number, your tax filing status, and the exact amount of your expected refund.

From this tool you can learn whether your return has been received yet or not, if it's been approved, and if the refund has been sent yet. This tool updates daily. 

Note that because of the recent IRS backups with processing tax returns, this tool might just say that your return or refund is processing and nothing more.

You have to wait at least 24 hours after filing electronically before your status will be available to check. If you filed paper files, then you have to wait at least 4 weeks before you can check your status. 

In Conclusion,

There's nothing more frustrating than waiting on delayed money you are owed. Thankfully, there are some reasons in your control that could help you get your refund sooner. To get the fastest tax refund, file electronically, set up direct deposit, and double check your tax return for errors before sending.