Delayed Tax Refund in 2021?

[John Sanderson]

Tax Refund Status

I've learned millions of Americans who've filed and claimed the Earned Income Credit or Child Tax Credit, are having their processing delayed. This is because of the $1.9T Covid Relief Bill recently passed, wherein the Earned Income and Child Tax Credits were increased, resulting in the IRS finding the tax many of the recent filings incorrect. Incorrect, because the IRS now needs to implement these new income tax laws, which will result in the IRS owing filers more refund money. If you know someone who is in this situation, tell them NOT TO FILE A CORRECTED RETURN. The result is the IRS has to adjust the anticipated refund with the additional amounts under the new retroactive credits.

Recent delays may be due to the IRS disagreeing with how much you say they owe you, thereby decreasing your actual refund. In this case the IRS is taking longer because they are now increasing your anticipated refund amount.

Further, if you know someone who already filed and got their refund before the current stimulus was approved, and their return included the child tax credit or earned income credit, then instruct them to file an "amended return" in order to take advantage of the increased credits/cash that they are now due.

[John Sanderson]

Tax Refund Status
Clarification Update

What's Going On?
I've learned millions of Americans who've filed and claimed the Earned Income Credit or Child Tax Credit, are waiting in excess of 21 days, some more then 6 weeks so far. This is because of the $1.9T Covid Relief Bill recently passed, wherein the Earned Income and Child Tax Credits were increased. As these changes are being implemented internally at the IRS, many returns are being forwarded for human review. Most often, this is done because the IRS disagrees with the stated refund amount, whether because they believe you owe money in taxes, or because they believe they owe a tax filer more than the stated refund amount.

In this situation, most often the IRS is finding, under the new tax laws and credit amounts, the IRS owes more money than stated refund amounts on tax filings.

What to do?
If you've filed a return and claimed either or both the Earned Income Credit or Child Tax Credits, and your refund is unusually late, you shouldn't do anything. It's likely being delayed while your return sits in a cue, to be reviewed by a real person. This is so they can apply the increased credits. If you file an amended return now, your amended return will go to the end of the cue and will restart your waiting time, as it is viewed as a new filing. Your best course of action is to wait. If you claimed the above mentioned credits, when you do finally receive your refund,
it should be more then expected.

After you finally get your refund:
If your refund is exactly, or very close to what you expected when you filed your return, it's possible the IRS didn't review your return manually and add the increased credits. If this is the case, it's suggested you file an amended return to take advantage of increased credits.

For my personal tax needs, I use H&R Block and add Audit Protection when filing. Other providers I've tried such as Jackson Hewett, Liberty Tax, or Turbo Tax, just don't compare in my opinion.