Federal Tax Refunds

Where’s my federal tax refund

Tax refunds refer to any reimbursements made to a taxpayer by the federal (or state) government for excess taxes paid. It’s often caused by employers withholding too much from an employee’s paycheck.

Technically, a tax refund is an interest-free loan to the government and should be avoided at all costs. Employees should file their tax forms correctly (including estimations) or make regular updates on deductions.

What US tax return

Do you need to fill out Form W-4

Employees need to fill out the form W-4 (also called Employee’s Withholding Certificate) when starting a new job or when having a change in their filing status (like getting married or having a baby or financial situation changed).

This return helps account for their filing status, dependents, tax deductions, and other details that can affect the tax burden.

The employer with make a withholding based on paycheck frequency, the W-4 form presented, and your agreed salary. The deduction will always lead to the three scenarios below:

1. Accurate withholding—the taxes withheld from paycheck will match actual taxes owed when the employee files their returns- in this case no refunds from IRS.
2. Under withholding— the taxes withheld from a paycheck are less than the actual taxes owed when the employee files their returns- in this case the employee is liable to pay taxes with penalties for underpayment.
3. Over withholding— the taxes withheld from a paycheck are more than the actual taxes owed when the employee files their returns- in this case the employee is due for a refund. When you file your tax return, this overpayment can only be accessed in the New Year.

An employer is required to treat any employee as a single filer (withholding the highest possible amount) in the absence of a W-4.

What else leads to Refunds from Tax Credits

Most taxpayers do not make a claim for tax credits (even when they qualify) in tax years when they don’t have a tax liability. Possible refunds include;

• Child tax credits:  Taxpayers can receive a refund of $2,000 per dependent for the tax year 2022($3,600 for the tax year 2021 due to the COVID-19 pandemic). Up to $1,500 out of the $2,000 is refundable at a dollar-for-dollar rate.
• Earned income tax credit (EITC or EIT): This is applicable to Taxpayers who earn low-to-moderate income. It reduces tax liability and may entitle a taxpayer to a refund.
• American opportunity tax credit (AOTC): It’s an annual credit of $2,500 per student to help taxpayers offset higher education costs paid on behalf of eligible students. If the credit drops your tax liability to zero, the IRS will refund up to 40% of any remaining amount of the credit (up to $1,000).
• Premium tax credit (PTC): Helps lower the cost of Health insurance (offered through federal or state exchanges) for Low to moderate-income households. If the taxpayer utilizes less credit than they qualify for then they can receive the balance in a refund.
• Taxpayers who are Self-employed may get a refund for overpaid estimated quarterly taxes.

How long federal tax refund

The IRS usually issues refunds within 21 days-with mailed returns (especially during covid-19 period) taking the longest of the 21 days. IRS may take longer than 21 days for both mailed and e-filed tax returns if they have questions and require reviews about your returns.

Taxpayers claiming the Earned Income Tax Credit or the additional child tax credit are due for a refund sooner than early March.

Federal tax refund schedule 2022

The rule of 21 days (on average) is applicable from the date IRS accepted the application. For the tax year 2022, IRS began accepting income tax returns on Jan. 24, 2022.

Below is a schedule of the dates filed and the expected refund dates;

Please note;

• IRS in some instances can delay the start of tax season by a week or so.
• Returns that have EITC or CTC refunds may face delays until March for verification.
• Returns made in peak season have slightly longer waits.
• If you file a tax extension and claim your refund later.

Delays in federal tax refunds

Timelines given by IRS are usually estimates (Do not plan your major purchases based on refunds).

Delays usually occur and most of the time it’s as a result of taxpayer mistakes, federal budget cuts, and overwhelmed tax preparers.

Why is IRS not processing your refund

Your Refund is being used to offset a debt

Under the offsets under Treasury Offset Program (TOP), IRS can offset refunds when taxpayers owe federal taxes (IRS notice CP49, Overpayment Applied to Taxes Owed), or they haven’t paid or owe other debts (non-tax debts).

Remember Spouses who are not affected can get their portion of the refund.

Your return is being held

The IRS can hold refunds pending requests for the submission of certain information or documentation. This is not an audit– but failure to respond on time may lead to an audit.

Common situations that lead IRS to hold a return include;

• The IRS flagged has flagged a “math error” (the error is not limited to arithmetic mistakes but also information mismatches and missing a corresponding schedule) in a mailed return after the fact. E-files are never affected by this since errors are usually rejected at the point of submission. IRS may change a return and then request a taxpayer through IRS notice CP21 to make corrections of errors within 60 days. If the taxpayer fails to provide the basis for the initial return then the IRS change will be final. At this point, the initial return has been amended, and follows up for refunds has been initiated afresh.
• In instances where the IRS identity theft filters pick an anomaly, it may lock the account until the user identity is verified effectively delaying a refund. Taxpayers will thereby receive IRS Letter 5071C asking them to verify their online identity.
• IRS is challenging a taxpayer’s tax credit(s). This is usually flagged by return screening filters, and the IRS may delay the refund and ask for more information. Technically, the taxpayer is undergoing an IRS audit (they will get a letter CP75).
• The IRS may pursue back tax returns, freezing all refunds until past-due returns are filed. Any tax liabilities in those old tax returns will be taken off the current year’s refund.
• New rules enacted by congress (effective 2017) had the effect of delaying refunds like EITC/ACTC Tax Delayed until Late February (IRS cant release these refunds earlier than Feb 15, while moving employers’ deadline to issue w-2 to January 31^st).

These rules ensure that IRS, for the first time, will have the time and information to verify returns before issuing refunds.

Federal tax return by mail

Address to federal tax return

IRS encourages taxpayers to file electronically due to the longer periods required to process paper tax returns could take several weeks longer.

Federal tax returns (Form 1040 or 1040-SR for current and prior years) should be mailed to the state tax return mailing addresses listed on the IRS website. The actual return mailing address will be dictated by the state or territory that you are a resident in, tax refund status or whether you need to submit a tax payment, and, in rare cases, the type of Form 1040 that you are filing.

Remember The Form 1040-X tax amendment form has different postal and/or UPS, and FedEx mailing addresses. Other tax forms might also list IRS mailing addresses (always check the informational pages).

Also, remember you can change your mailing address by completing the address change Form 8822 and mailing it in (no option for e-file form 8822) – that mailing address is on form 8822(also submit a Change of Address to the USPS). Alternatively, you can also wait until you complete your next tax return and change your address if not expecting urgent letters or checks from the IRS.

Lastly, Refund checks are usually mailed to the last known address. If you happened to change address without notifying IRS, the refund check will be returned to the IRS.

Federal tax refund tracker

Are you expecting a refund and it’s not forthcoming?

The taxpayer can use the methods below to find out what’s causing the holdup;

• Visit the IRS’ Where’s My Refund page
• Use the IRS app called IRS2Go.
• Call the IRS hotline at 1-800-829-1954 or 1-800-829-4477

A taxpayer can only use the status checker if they have this data;

• The Social Security number
• Filing status
• Exact dollar amount refunded as per the return

The IRS updates this Information once a day, overnight.  Tax hence can check the refund status every 24 hours after e-filing. Please allow 3 or 4 days after e-filing and around 4 weeks if the taxpayer filed a paper return.

Federal tax return amended status

The IRS only accepts Amended returns via hard mail. This takes up to 3 weeks to show up on the IRS system.

Processing the same will take up to 16 weeks.

To check the status, the taxpayer will need;

• Social Security Number
• Date of birth
• Zip Code

Federal tax return accepted

1. Once submitted by the tax software, tax preparer, or a paper refund, the IRS receives it (You will see an “accepted” message in the tracking software). Basically, this implies the return passed the basic test (valid social security number, etc.)
2. IRS queues the return for processing. This marks the beginning of the 21-day average.
3. At the 21-day mark, the message status changes to either “approved” or “take action”. Approved status comes with a date and may see a direct deposit in your account after a few days.  ”Take action” may point to an issue with the refund application.

Federal tax return dates 2022

• The IRS will start accepting e-File tax returns on January 23, 2023. 
• The tax deadline for 2023 will be April 18, 2023 (moved to Tuesday since April 15 is a Saturday, and Monday, April 17 is Emancipation Day).
• A taxpayer can legally mail in their 2022 tax return from January 1, 2023. The taxpayer should expect at least 12 weeks for their processing time (at the low end).

Bottom Line

• Always applying for refunds year in and year out is a big indicator of not correctly calculating your taxes. It’s wise to update the W-4 else you will needlessly overpay your taxes while living on less of your paycheck.
• Taxpayers have up to three years to claim their refund from the initial filing deadline. Taxpayers on extension have the same three years from the extended deadline to ask for a refund check.
• Avoid filing paper tax returns and always opt for direct deposits to speed up your refunds. Alternatively, the taxpayers can use the refund to buy U.S. Series I Savings Bonds.
• Follow up on tax refund after at least 21 days of filing online or six months of mailing your paper return. You can visit a local IRS office or call their hotline numbers. These will not fast-track your refund, but rather shed some light on the holdup and also get a chance to ask for replacement checks.
• Taxpayers need to be on the lookout if the refund check seems larger than it should be. Anyone with liabilities in child support or overdue student loan bills may have their refunds applied to these debts.