Taxpayers in several states may face tax refund delays as long as six weeks this filing season as agencies work through changes in tax policy and filing systems, Kiplinger’s reports.
Tax refunds are issued when taxpayers overpay their taxes during the year compared to their final liability after deductions and credits. Federal refunds are handled by the IRS, while state agencies distribute their own refunds under separate rules.
This year’s refunds have been larger following the One Big Beautiful Bill Act (OBBBA), which extended lower tax rates and introduced new deductions.
Those changes forced the IRS and Treasury Department, as well as state agencies, to update forms, rules and processing systems — contributing to delays.
Many taxpayers rely on refunds to help cover household expenses or major purchases.
In New York, early filers may face delays tied to software updates implemented in early February, which could leave some returns stuck in a “processing loop.”
Additional complications may stem from federal tax changes and the state’s inflation refund checks issued late last year.
Idaho officials say refunds could be delayed up to six weeks due to staffing shortages after recent budget cuts, which reduced the number of temporary workers available to process returns.
The state also updated its tax code to mirror some OBBBA provisions, adding further complexity.
Oregon is warning that taxpayers who filed paper returns won’t see refunds until early April, as processing for those returns won’t begin until later this month.
The delay is tied to late-arriving IRS forms and updates related to OBBBA, including changes like a larger standard deduction and new overtime deductions.
Officials are urging residents to file electronically to avoid delays.
In South Carolina, lawmakers did not fully align state tax rules with OBBBA, creating discrepancies that have caused issues with tax software. Some filers may need to amend their returns as a result.
Meanwhile, taxpayers in Washington, D.C., could also face delays after Congress overturned a local tax law, forcing system updates and potentially requiring some residents to re-file.
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