Is your 2020 tax refund still processing with the IRS?

Like many taxpayers, your tax refund may be delayed.

The COVID-19 pandemic hit the world by storm. From stimulus payments, tax changes and extending the tax deadline, your refund may be taking longer than expected.

If you noticed that your tax refund is stuck on the “processing” status when checking the IRS Where’s My Refund Tool, you may need to allow some more time for the IRS to disburse your refund. Instead of taxpayers receiving their tax refund within two to three weeks, taxpayers are waiting from six to eight weeks to get their refund.

Here’s why your refund may still be delayed with the IRS.

Recovery Rebate Credit

If you filed the Recovery Rebate Credit, prepare for longer waiting times. The IRS is cross-checking stimulus payment records and adjusting tax refunds if they are incorrect. The IRS will send a letter or notice explaining the details if your tax return requires an adjustment.

For more information on this, click here to read the IRS update on their website.

Unemployment Exclusion

If you did not file with the unemployment exclusion (since it was in affect after the beginning of the tax season), you can expect your tax refund during the month and into the summer. Many taxpayers are already receiving their refund if the IRS must adjust it.

The IRS specifies that amending your tax return will not expedite your refund disbursement. They have indicated that they will automatically adjust tax refunds with the correct calculations.

For more information on this, click here to read the IRS update on their website.

Verifying your Identity

If you received a 5071C letter, 5747C letter, 6331C letter, or 5447C letter, you can verify your identity with the IRS online. For a 4883C letter or a 6330C letter, you must refer to the instructions on the letter. If you are having difficulty using the online service or don’t have the required documentation, contact the toll-free number on your IRS letter.

Direct Deposit Information

In the case that you entered incorrect direct deposit information, the IRS will attempt to deposit your refund to that account. If it is incorrect, the IRS will issue you a check in the mail.

However, if the account belongs to someone else and your designated financial institution accepts the deposit, you must contact your financial institution. You can also attempt to contact the IRS at 1800-829-1040 to stop the direct deposit.

Back Taxes or Other Debt

The IRS can hold your refund or apply it to previous years’ tax liabilities if you have any outstanding taxes. If you owe taxes to the IRS and they apply your refund to your back taxes, you will receive a notice called CP49, Overpayment Applied to Taxes Owed.

Amended Tax Returns

If you filed Form 1040X to amend your tax return, you will need to allow additional time. The turnaround for these tax returns are 16 weeks.

Check your refund status.

Although it’s frustrating to wait, be sure to consistently check the IRS Where’s My Refund Tool to track your refund. As a reminder, if you missed the tax deadline and need to file, click here for more information.

This entry was posted on Thursday, June 10th, 2021 at 9:49 pm and is filed under Tax Tips and Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.