Tax & Accounting Blog

States Already Warning of Delayed Taxpayer Refunds

State & Local Tax, Tax February 5, 2016

Practitioners in several states may need to warn clients that refunds could be delayed this tax season. Four states have already announced that they anticipate delaying taxpayer refunds this filing season, with three of the states citing new anti-fraud measures as the reason.

  • The Utah State Tax Commission announced that new safeguards in their return processing may delay refunds. Legislation passed in 2015 now allows their Tax Commission to compare withholding claims on individual tax returns against employer filings prior to issuing refunds. The state warns that employers who file withholding late may delay refunds for their employees until after March 1.
  • The Hawaii Department of Taxation has adopted similar safeguards, and warns that their additional processing may delay refunds for some taxpayers for as long as 16 weeks. The state encourages taxpayers expecting refunds to file early for the best chance at receiving a quick refund.
  • The South Carolina Department of Revenue has also notified taxpayers that as a result of new anti-fraud measures, any taxpayer filing before March 1 should not expect to receive their refund until at least mid-March, while taxpayers submitting returns after March 1 can expect to receive refunds within two to three weeks of the filing date.
  • The Illinois Department of Revenue issued a similar statement: “The Department does not anticipate releasing individual income tax refunds until March 1, 2016.” They did not provide specific reasons for the delay.

Have you heard of other states delaying refunds this season? If so, let us know in the comments and we’ll do our best to update this article accordingly.