Please ensure Javascript is enabled for purposes of website accessibility

State Governments, Seeking to Be Less Popular, Delay Tax Refunds

Taxpayers in Hawaii, Iowa, North Carolina, New York, and Rhode Island expecting a refund may have to exercise some patience, as these states have already declared their intentions to delay cutting those checks to its citizens. And don’t get to excited about receiving any interest on your already interest-free loan you gave them; many states have to withhold refunds for at least 60 days before interest has to be paid.

Pulling this type of a stunt will get you nowhere in a popularity contest but hell, they don’t really have much of a choice:

Scott D. Pattison, the executive director of the National Association of State Budget Officers, said that it was “exceptionally unusual” for so many states to delay refunds, as they have throughout the current economic downturn.

“I think it’s just an indicator of how bad things have been,” Mr. Pattison said in an interview. “It’s politically, obviously, a problem. Also, I think from a policy standpoint, it’s a little hard to justify — this is the taxpayers’ overpayment that is due them.”

Obviously this is going to cause some tea-baggish belly aching but it is pointed out later in the article, if taxpayers really want to do something about this problem, they have the ability to make some changes themselves to avoid this in the future:

Verenda Smith, a spokeswoman for the Federation of Tax Administrators…said she hoped the troubles would prompt more taxpayers to file earlier; file electronically, which allows for much quicker processing time; and change their withholding status with their employers so they would not overpay so much. “You really shouldn’t give it to your state government as a no-interest loan, and then have to cool your heels while you wait to get it back,” she said.

We’ve mentioned this before but it bears repeating – adjusting your withholding to get a big refund is stupid. We’d say that the states keeping it out of your hands was probably a good thing but then again, the state can waste the money just as well.

Half a Dozen States Delay Tax Refunds [NYT]

Taxpayers in Hawaii, Iowa, North Carolina, New York, and Rhode Island expecting a refund may have to exercise some patience, as these states have already declared their intentions to delay cutting those checks to its citizens. And don’t get to excited about receiving any interest on your already interest-free loan you gave them; many states have to withhold refunds for at least 60 days before interest has to be paid.

Pulling this type of a stunt will get you nowhere in a popularity contest but hell, they don’t really have much of a choice:

Scott D. Pattison, the executive director of the National Association of State Budget Officers, said that it was “exceptionally unusual” for so many states to delay refunds, as they have throughout the current economic downturn.

“I think it’s just an indicator of how bad things have been,” Mr. Pattison said in an interview. “It’s politically, obviously, a problem. Also, I think from a policy standpoint, it’s a little hard to justify — this is the taxpayers’ overpayment that is due them.”

Obviously this is going to cause some tea-baggish belly aching but it is pointed out later in the article, if taxpayers really want to do something about this problem, they have the ability to make some changes themselves to avoid this in the future:

Verenda Smith, a spokeswoman for the Federation of Tax Administrators…said she hoped the troubles would prompt more taxpayers to file earlier; file electronically, which allows for much quicker processing time; and change their withholding status with their employers so they would not overpay so much. “You really shouldn’t give it to your state government as a no-interest loan, and then have to cool your heels while you wait to get it back,” she said.

We’ve mentioned this before but it bears repeating – adjusting your withholding to get a big refund is stupid. We’d say that the states keeping it out of your hands was probably a good thing but then again, the state can waste the money just as well.

Half a Dozen States Delay Tax Refunds [NYT]

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

The 2022 Bloomberg Tax Author Awards Celebrate the Pinnacle of Tax Intelligence

Once again, in what can only be described as an attempt to market its tax platform, Bloomberg has released its annual awards for the Bloomberg Tax Authors of the Year. We’ll just mention the Federal authors of the year here, but there are also three other categories of Bloomberg author awards: State Tax, International Tax, […]

screenshot of Ask an AI Accountant answering a tax question about gambling winnings

GPT-4 Answers Tax Questions, Gets Them Mostly Right

These days there is a lot of yapping about what AI can and can’t do; it CAN answer bar exam questions so well it’s nearly in the 90th percentile of test-takers, it CAN’T search in real time to find up-to-date answers beyond what it’s been trained on so it won’t be getting stuck in a […]