Back in March, when the COVID-19 outbreak ramped up across the U.S., the IRS made the decision to close the bulk of its offices to protect its agents and promote social distancing. It also pushed back the tax-filing deadline from April 15 to July 15.
But now, the IRS is in the process of opening its offices back up. And once more employees are back to work in person, the agency will have one big priority: processing paper tax returns that have been sitting untouched since the pandemic kicked off.
Staffing issues have delayed refunds
The IRS admits that tax refunds are being delayed this year, but the bulk of those delays are impacting people who filed a return on paper. The reason? There's been limited staff on site to actually wade through those returns and process them.
But recently, the IRS announced that catching up on paper returns will be a top priority in the coming weeks. That's good news for tax-filers who may be counting on a refund to make ends meet.
When will your refund come in?
If you filed your taxes electronically this year, you can expect your refund within 21 days -- possibly sooner, if you signed up for direct deposit. But that assumes your return was accurate and didn't raise any red flags. Errors such as an incorrect Social Security number or filing status could delay your refund, as could a need for the IRS to dig deeper into your return.
Why might that happen? Say you forgot to report income you earned on the side. If the IRS got a 1099 form stating you received that money in 2019, but you didn't include it on your tax return, you'll need to reconcile that before your refund can be processed. In that case, the IRS will generally reach out to you by mail asking you to agree to that correction.
Meanwhile, under normal circumstances, paper returns take up to six weeks to process, but if you sent one in earlier in the year, you may end up waiting much longer than that for a refund. This especially holds true if you didn't agree to direct deposit, but rather are waiting on a check to arrive in the mail.
How to check the status of your refund
Whether you filed your 2019 taxes electronically or on paper, you may be eager to know when to expect your refund. The IRS has a "Where's My Refund?" tool you can use to access that information. You'll just need to provide your Social Security number, tax-filing status, and refund amount.
You should be able to track your refund online within 24 hours of submitting an electronic return. With a paper return, that information generally isn't available for a good four weeks, and this year, it may take even longer due to the existing backlog.
Thankfully, the IRS will be paying interest on overdue refunds dating back to April 15. If you've been waiting on your refund for quite some time already, rest assured that you'll be getting a little extra money for that inconvenience. That interest, however, may come in the form of a second deposit or check, so don't be shocked if you first get the original refund you claimed, and then a follow-up payment afterward.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 2/1/20
The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.