The deadline for filing your tax returns was extended to May 17 this year, but even if you filed earlier you may still be waiting for a refund. When you check your status, you may find that your tax return is still being processed. You are not alone.

A Challenging Year

2020 was a challenging year for just about everyone, including the Internal Revenue Service (IRS). The agency ran at limited capacity last year, having closed most offices and even laying off staff. Some of their offices continued to be closed through the early months of 2021 and they weren’t accepting tax returns until February 12.

All of this strained their ability to process tax returns, along with the added work of sending out multiple stimulus payments in 2020 and 2021. Although they are open again, the IRS staff has a lot of work to do to catch up on processing mail, responding to correspondence, and processing tax returns. That includes delays in issuing refunds.

Returns That Require Review

Most straightforward tax returns are being processed in 21 days or less, but some will take longer, even during “normal” times. Mailed paper tax returns, for example, will take much longer as they are among the multitude of mail pieces still being opened and processed. The IRS estimates that it can six to eight weeks to receive a tax refund when you submit your tax return by mail rather than electronically.

If your returns requires a review, that will cause a further delay. You may have your return reviewed for determining recovery rebate credit amounts for the first two stimulus payments, figuring earned income tax credits, and figuring additional child tax credits.

Other reasons your tax return is still being processed and your refund is delayed include:

• The return itself is incomplete. You may be missing a number or a signature, for example.
• Your return contains errors.
• You are a victim of identity theft or fraud that has affected your tax return.
• You included Form 8379, for an injured spouse allocation, which can delay processing for up to 14 weeks.
• Your return needs further review for other reasons as flagged by an IRS representative.

Refund Delays

When counting the 21-day timeframe that the IRS gives as a guideline for processing your tax return, if you are expecting a refund you may have to add time for processing that payment. If you requested a check to be mailed, that will take as long as the post office takes to process and deliver it after the IRS issues the check.

if you requested that funds be deposited electronically into your bank account, the actual date that money becomes available will depend on the time it takes your bank to process the payment. You can check the IRS Where’s My Refund site to see when to expect a refund to be sent or deposited.

2019 Returns Still Being Processed

In May 2021, IRS Commissioner Charles Rettig stated that the agency is still processing tax returns from 2019 and that they may not all be completed for at least two more months. Rettig said that about 335,000 2019 tax returns are still to be processed. In January 2021, that number was at around 7 million returns from the 2019 tax season, primarily because of the delays faced by the agency in 2020. The IRS states that, as of May 28, 2021, a total of 18.1 million unprocessed individual returns are “still in the pipeline,” including returns for the 2020 tax year.

Calling Won’t Help

The IRS says they are open again and are trying to catch up with returns, mail, payments, and refunds; however, they are still facing delays in areas including processing paper returns, answering mail, reviewing tax returns, and live phone support. In fact, they advise that unless you see a message on the Where’s My Refund site to call them, their representatives will not be able to further clarify why your tax return is still processing.

CLEAR VIEW BUSINESS SOLUTIONS OFFERS PROFESSIONAL TAX MANAGEMENT SERVICES

The experts at Clear View know what you need to do and when you need to do it, at tax time and throughout the year. We can help ensure that you are maximizing your available credits and deductions and minimizing your tax payment. We work with you to help you be better prepared to make sound financial decisions and to plan for your success. Learn more about how we can help you and your business by contacting Clear View Business Solutions to speak to our team about our services. Give us a call at (520) 544-0177.