My Tax Refund Is Late! Why Is It So Delayed? Details …

Last Updated on June 1, 2021

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Tax refunds feel like a light at the end of the tunnel. After a year dealing with Covid-19 people want to find a fast track to extra cash. The issue: The IRS isn’t quite ready. For now, millions of people are going without their 2020 tax refunds, and that’s causing a sense of panic.

Don’t worry! Here’s why your refund is delayed and what you can do while you wait:


Paperwork Overload


Just like a printer jamming, the IRS is trying to file millions of tax refunds at once without the necessary processing power. It doesn’t help that the agency recently downsized, having lost 15 percent of its employees since 2020 due to budget cuts.


With pandemic-related issues, 470 million stimulus payments to process, and new tax codes forcing the re-examination of millions of filings, the IRS has way more than it can chew. Doing more with less has caused a severe backlog, and the normal 21-day promise for tax refunds is getting delayed by the day.


The IRS is backlogged with millions of tax refunds. What can you do will you wait?
The IRS is backlogged with millions of tax refunds. What can you do will you wait? Photo credit: Sam Wordley /


What’s The Damage?


Considering that the average American received $2,873 from their tax return last year, the delayed filings are costing taxpayers hundreds of millions of dollars. Not only does this keep that money from the hands of hard-working citizens who need to pay bills, but it also keeps that money out of the economy. This can become a deeper issue than lighter-than-normal bank accounts.


On top of this, the IRS pays out three-percent interest per year on a delayed tax refund, which is nice for the individuals but ends up costing the government big time. It can also cause problems next year, since the IRS taxes on that interest.


What Not To Do


If your tax refund is late, don’t fret! You and millions of other Americans are waiting for your refunds. When everyone bombards phone lines to get answers, no one gets answers. The commissioner of the IRS claimed that the agency is receiving 1,500 calls per second with only two percent getting through to the hotline. Even if you’re one of the lucky ones you won’t get the answer your looking for. The IRS representatives cannot say when you will receive your refund since there is likely no specific date chosen yet.


Whistle While You Wait?


No! You can find out the status of your refund using this tool. Where’s My Refund? Will have the updated information about your specific return, rather than a generic response. Even better, you won’t have to wait on hold.

Try A Loan?


If you are highly dependent on your tax refund a loan might be the way to go. There are plenty of options that vary depending on your financial situation. If holding out isn’t possible, getting a SoFi or LightStream loan could be worthwhile, especially with interest rates as low as 3.99 percent. The interest rates the IRS offers for late returns can offset some of the interest from the loan. This gives you the chance to pay off bills and buy necessities without being at the mercy of the IRS.


How Much Longer?


The IRS is still holding 29 million tax returns, and they are being manually processed. That means it could still be a while before the money is in your hands. The changing tax code passed by Congress in March, limited resources, and outdated systems are all working toward disrupting normal processes. There is also a backlog of 2019 tax returns that were filed on paper, forcing more IRS resources to be funneled elsewhere.


For those waiting, it shouldn’t be much longer. If you are at the top of the stack your check or direct deposit could arrive next week. But many will not get their checks that quickly. Be patient – it’s on its way!