IRS Tax Refund Update monitoring the latest developments this tax season as the latest batch of Tax Refunds have now been issued, with reports coming in from taxpayers that those direct deposits are reaching their bank accounts. Meanwhile we will recap those tax refund delays many continue to experience including early filers, those claiming tax credits and filing paper returns and continued reports of adjusted refunds this tax season. The latest developing news this tax season is that the April 20th batch of tax refunds have now been issued and transmitted by the IRS to banks nationwide. Taxpayers who have accounts with Bank of America, Chime, Credit Karma, Chase, and Wells Fargo were among the first to confirm those direct deposits have in fact reached their accounts as scheduled. While a majority that are part of this batch will receive those deposits the day of, some taxpayers can expect to wait an additional 1-2 days to post to their accounts. If you are part of latest batch and do not receive your refund by Monday, April 25th you may need to initiate a payment trace with the IRS to locate the refund, do note if the IRS receives that direct deposit back as rejected, they will automatically issue out a paper check to the address on file. Meanwhile taxpayers continue to report delays in the processing of their tax returns and issuing of refunds. Now this is happening despite 96% of all submitted tax returns so far being processed this tax season. Now there are several reasons why taxpayers may be experiencing delays with the processing of refunds aside from extended processing times and they include ID verification needed, incorrect tax credit amounts entered on the tax return, or wage information does not match what the IRS has on file. A significant number of taxpayers this season have reported having their tax refund placed on hold due to identity verification needed many of whom were not aware this was the cause of the delay until they reached the IRS by phone or spoke to a Taxpayer advocate. If you are subject to ID verification you are supposed to be mailed out the 5071C letter but in a number of instances impacted taxpayers are reporting not receiving it causing to the confusion. Meanwhile taxpayers continue to report in that the IRS has adjusted their refund amounts like seen here. Now they are multiple reasons in the reduction of refunds including past due tax debt, but what we have seen this tax season a significant amount of reductions has to do with tax credits such as the Recovery Rebate Credit, Child Tax Credits and the earned income tax credit.
Disclaimer: This is for informational purposes only and is subject to change. Material provided should not be considered tax, accounting, or legal advice. Please consult a certified tax consultant for tax advice.
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