Tax Day is here, and if you filed your 2019 taxes only recently, you might be impatiently awaiting a refund, especially during a year when many of us have faced financial difficulties. The COVID-19 pandemic has delayed tax season this year, and many IRS offices closed due to safety concerns. All of that on top of the fact that the IRS has been understaffed for a while now, and it makes sense to worry that this means your refund might also be very delayed.
And it’s true, millions who filed before the July 15th deadline seem to still be waiting for their refund. The IRS’ official line is that most refunds are issued around 21 days after the agency receives your tax return — if you e-file. Most of the current backlog of are unprocessed paper tax returns. As of mid-May, it was estimated that the IRS was working through about 4.7 million backed-up paper returns. According to the Wall Street Journal, by mid-June that backlog had ballooned to 12.3 million paper tax returns and “correspondence,” but by July 4th, unprocessed paper returns were down to 3.6 million. The IRS’ most recent filing statistics show that close to 92% of the returns it has received have been processed, but many more returns are expected to be filed between now and October 15th, which is the deadline for people who request an extension on filing. The IRS has stated that almost 90% of people file their taxes electronically now.
So if you filed using tax software or an online tax tool, chances are you won’t have to wait too long for your refund. The IRS’ recommendation is that you use its Where’s My Refund tool to keep checking on the status of your return. The agency explicitly tells you not to call them or file another return.
One good bit of news is that, if you haven’t gotten your refund yet, the IRS will be paying some interest on it. Since taxes are usually due on April 15th, tax law technically considers your refund to be late this year. The interest rate that applied until June 30th was 5%; July until September 30th, the interest rate is 3%. This interest will be compounded daily, but it will count towards your taxable income next year.
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