Tax refund delays are impacting residents in multiple states and Washington, DC this filing season, with the scope wider than initially anticipated. Issues stem from budget cuts, software failures, and a legal standoff in DC over federal tax law conformity. Tax professionals warn that state-level conformity to recent federal changes remains a significant hurdle, potentially causing extended processing times for many filers seeking their refunds.
Tax refund delays are hitting taxpayers in several states and Washington, DC this filing season. Budget cuts, software failures, and an active legal standoff between DC and the federal government all play a role.
Richard Pon, a certified public accountant in San Francisco, stated: “State tax conformity will be the biggest hurdles as some states conform, some don’t conform and some only partially conform to Trump’s new tax laws.” Idaho is currently dealing with delays of up to six weeks due to workforce reductions and late legislative action.
Governor Brad Little did not sign the state’s federal conformity bill until Feb. 11, after many residents had already filed. Tax Commission Chairman Jeff McCray explained that updating systems normally takes nine months but is now a priority.
Oregon’s Department of Revenue will not process paper returns until at least the end of March, with first refunds in early April. New York filers encountered a TurboTax software issue that halted early return processing.
South Carolina requires taxpayers to manually add back certain deductions on their returns due to non-conformity. The DC situation is particularly complex, with a congressional reversal creating a legal dispute.
The DC Office of Tax and Revenue confirmed that income tax forms will be delayed. Approximately 60,000 DC residents who already filed may need to refile, with potential delays running to September.
For federal returns, the IRS “Where’s My Refund?” tool is recommended after the standard 21-day window. Taxpayers should check their state’s Department of Revenue website for specific state refund status updates.
